1. Section 402 of the Revenue Act of 1921 provides that, in
determining the value of the gross estate of a decedent for the
purpose of the federal estate tax, there shall be included the
value at the time of his death of all property "to the extent of
the interest therein held jointly or as tenants by the entirety by
the decedent and any other person."
Held, the inclusion,
in the gross estate of a decedent who died while the provision of
this section was in effect, of one-half the value of property held
by him and his wife as joint tenants, though the tenancy was
created prior to the effective date of the statute, was not a
retroactive application of the statute. P.
290 U. S.
58.
2. The cessation at death of decedent's interest in, and control
over, half of property held with another as joint tenants presented
a proper occasion for the imposition of a tax.
Gwinn v.
Commissioner, 287 U. S. 224. P.
290 U. S.
58.
62 F.2d 591 affirmed.
Page 290 U. S. 57
Certiorari, 289 U.S. 722, to review a judgment affirming a
decision of the Board of Tax Appeals, 23 B.T.A. 635, redetermining
a deficiency in estate tax.
MR. JUSTICE SUTHERLAND delivered the opinion of the Court.
Section 402 of the Revenue Act of 1921, c. 136, 42 Stat. 227,
278, imposing an inheritance tax, provides:
"Sec. 402. That the value of the gross estate of the decedent
shall be determined by including the value at the time of his death
of all property --"
"
* * * *"
"(d) To the extent of the interest therein held jointly or as
tenants in the entirety by the decedent and any other person. . .
."
The decedent died in 1923, while the foregoing provision was in
effect. At the time of his death, he and his wife held as joint
tenants certain real estate in Illinois, title to which vested in
them by conveyance on October 5, 1909. The commissioner valued this
real estate at $90,000, and included the whole of it in the value
of decedent's gross estate as being within the reach of ยง 402(d).
Upon appeal to the Board of Tax Appeals, that tribunal,
disapproving in part the commissioner's determination, held that
the value of only decedent's one-half of the property could be
included for the purposes of the tax. 23 B.T.A. 635. The Circuit
Court of Appeals affirmed.
Commissioner v. Emery, 62 F.2d
591.
Page 290 U. S. 58
Whether this application of the statute gives it a retroactive
effect is the sole question here involved, and with that we find no
difficulty. Under the statute, the death of decedent is the event
in respect of which the tax is laid. It is the existence of the
joint tenancy at that time, and not its creation at the earlier
date, which furnishes the basis for the tax. By the judgment under
review, only half of the value -- that is to say, the value of
decedent's interest -- has been included, leaving the survivor's
interest unaffected. After the creation of the joint tenancy, and
until his death, decedent retained his interest in, and control
over, half of the property. Cessation of that interest and control
at death presented the proper occasion for the imposition of a tax.
See Gwinn v. Commissioner, 287 U.
S. 224, and cases cited. And since that is all that is
sought to be reached by the tax here in question, the complaint
that the statute has been given a retroactive application obviously
is without substance. The statute as applied does not lay a tax in
respect of an event already past, but in respect of one yet to
happen.
Petitioners insist that
Knox v. McElligott,
258 U. S. 546, is
to the contrary, but clearly it is not. There, the tax return
included the value of decedent's one-half of the jointly owned
property, but did not include the value of the half which had been
owned and enjoyed by the surviving joint tenant. Nevertheless, the
commissioner undertook to impose a tax in respect of the value of
this latter half as well. This Court held that to do so was to
apply the statute retroactively, and that this, under the
circumstances of that case, could not be done. It did not hold, or
intend to hold, that the statute was retroactive insofar as the
value of the decedent's half of the joint estate was concerned.
That question was not there involved. It is the only question
here.
Judgment affirmed.
