United States Supreme Court Cases & Opinions

U.S. Supreme Court

Irwin v. Gavit, 268 U.S. 161 (1925)

Irwin v. Gavit

No. 325

Argued April 15, 1925

Decided April 27, 1925

268 U.S. 161

Syllabus

1. A will provided that the income from a fund in trust should be applied to the education and support of the testator's granddaughter so far as the trustees deemed proper, and that the balance of it should be divided into two equal parts, one of which should be paid to the plaintiff in equal, quarter-yearly installments during his life. On the granddaughter's reaching the age of twenty-one or dying, the fund was to go over, so that, considering her age, the plaintiff's interest could not exceed fifteen years. Held that the sums paid the plaintiff were taxable income within the meaning of the Constitution, and of the Income Tax Act of October 3, 1913, which taxed "the entire net income arising or accruing . . . to every citizen of the United States" and defined net income as

"gains or profits and income derived from any source whatever, including the income from but not the value of property acquired by gift, bequest, devise, or descent."

P. 268 U. S. 166.

2. The provision of the above act exempting bequests assumes the gift of a corpus, and contrasts it with the income arising from it, but was not intended to exempt income, properly so called, simply because of a severance between it and the principal fund. P. 268 U. S. 167.

3. The rule that tax laws shall be construed favorably for the taxpayers is not a reason for creating or exaggerating doubts of their meaning. P. 268 U. S. 168.

295 F. 84 reversed.

Certiorari to a judgment of the Circuit Court of Appeals affirming a judgment for the plaintiff in an action to recover taxes and penalties exacted under an income tax law. See 275 F.6d 3.

Page 268 U. S. 165