United States Supreme Court Cases & Opinions

U.S. Supreme Court

Commissioner v. Disston, 325 U.S. 442 (1945)

Commissioner v. Disston

No. 59

Argued April 24, 1945

Decided June 4, 1945

325 U.S. 442

Syllabus

1. Irrevocable trusts for the benefit of minors provided for accumulation of the income from each beneficiary's share until he reached the age of 21, for payment of the income thereafter during his lifetime, and for ultimate distribution of the corpus contingently. The trustees were authorized to apply, during the minority of any beneficiary, so much of the income from his share "as may be necessary" for his support, education, and comfort, and to expend up to 10% of the corpus in an "emergency."

Held: that gifts to the trusts were of "future interests," within the meaning of § 504(b) of the Revenue Act of 1932 and applicable Treasury Regulations, so that, in computing the gift tax, the $5,000 exclusion prescribed by that section was not allowable. Fondre v. Commissioner, 324 U. S. 18. P. 325 U. S. 447.

2. A taxpayer claiming benefit of the 5,000 exclusion in computing a gift tax under § 504(b) of the Revenue Act of 1932 has the burden of showing that the gift to which the claim relates was not of a "future interest." P. 325 U. S. 449.

3. In computing the gift tax pursuant to the formula prescribed by § 502 of the Revenue Act of 1932, an adjustment may be made in the net gift figure for an earlier year, even though assessment and collection of a gift tax for such earlier year be barred by limitations. P. 325 U. S. 449.

144 F.2d 115 reversed.

Certiorari, 324 U.S. 832, to review the reversal of a decision of the Tax Court which sustained the Commissioner's determination of deficiencies in gift taxes.

Page 325 U. S. 443