United States Supreme Court Cases & Opinions

U.S. Supreme Court

Robinette v. Helvering, 318 U.S. 184 (1943)

Robinette v. Helvering

No. 499

Argued January 14, 1943

Decided February 15, 1943*

318 U.S. 184

Syllabus

A woman, contemplating marriage, created an irrevocable trust of property, under which she was to receive the income during her life; upon her death, her mother and stepfather were to have a life interest in the income; the remainder was to go to her issue upon their reaching the age of 21, and, in default of issue, then to whomever the last surviving life tenant should appoint by will. Her mother created 3 similar trust, reserving a life interest to herself and her husband, with a second life. interest to the daughter, and remainder to the daughter's issue. Concededly, the secondary life interests were subject to the federal gift tax.

Held:

1. The remainders (after the life interests) were taxable gifts under the Revenue Act of 1932. Smith v. Shaughnessy, ante p. 318 U. S. 176. P. 318 U. S. 186.

2. The fact that, on the date of the creation of the trust, there were in existence no eligible remaindermen does not defeat the gift tax. P. 318 U. S. 186.

3. The transfers in this case cannot be regarded as supported by "full consideration in money or money's worth" within the meaning of § 503 of the Act, nor as "in the ordinary course of business" within the meaning of Art. 8 of Treasury Regulations 79. P. 318 U. S. 187.

4. The value of the reversionary interests of the grantors in this case, being incapable of ascertainment by recognized actuarial methods,

Page 318 U. S. 185

is not deductible in computing the gift tax. Smith v. Shaughnessy, ante, p. 318 U. S. 176, distinguished. P. 318 U. S. 188.

129 F.2d 832 affirmed.

Certiorari, 317 U.S. 620, to review the reversal of a decision of the Board of Tax Appeals, 44 B.T.A. 701, which reversed in two cases, consolidated for hearing before the Board and in the court below, determinations of deficiencies in federal gift taxes.