DocketNumber: Docket No. 92388
Citation Numbers: 43 B.T.A. 569
Judges: Mtjrdock
Filed Date: 2/12/1941
Status: Precedential
Modified Date: 10/17/2022
The Commissioner relies entirely upon section 22 (a) of the Revenue Act of 1934 and cites Helvering v. Clifford, 309 U. S. 331, and Morton Stein, 41 B. T. A. 994. There is some uncertainty as to the extent of the applicability of section 22 (a) under the decision in the Clifford case. White v. Higgins, 116 Fed. (2d) 312; Commissioner v. Berolzheimer, 116 Fed. (2d) 628. Cf. Commissioner v. Branch, 114 Fed. (2d) 985; Helvering v. Achelis, 112 Fed. (2d) 929. However, the Court in the Clifford case said that Congress intended to exercise its taxing powers to the limit in section 22 (a). The Circuit Court of Appeals for the Second Circuit in the Berolzheimer case interprets the Clifford case as holding “that a grantor of a short term trust, under which he is to be the trustee and to have such broad powers over the disposal of the principal as to approximate those of a owner and under which the income is to remain in his family and the reversion in himself, will be subjected to income taxes as owner.” The terms of the particular trust and all the circumstances attendant upon its creation and operation must be analyzed in order to determine whether the grantor has retained such substantial control over the trust property that he may be treated for tax purposes as the owner of the corpus taxable with the income under section 22 (a).
The present trust is similar to the trust in the Clifford case in many respects. The petitioner has pointed out some of the differences between the two trusts in an effort to distinguish this case from the Clifford case. The maximum limit of the present trust was ten years whereas that of the Clifford trust was five years. This does not distinguish the Berolzheimer case, however, where the maximum limit of the trust was also ten years. Furthermore, the trusts in the Higgins case and in the Stein case were for life at least. The present trust might have lasted beyond the life of the grantor, but the same was true in the Higgins trusts. The petitioner, as trustee, was required
Reviewed by the Board.
Decision will be entered for the respondent.