279 U.S. 151 (1929), 267, Ithaca Trust Co. v. United States

Docket Nº:No. 267
Citation:279 U.S. 151, 49 S.Ct. 291, 73 L.Ed. 647
Party Name:Ithaca Trust Co. v. United States
Case Date:April 08, 1929
Court:United States Supreme Court
 
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Page 151

279 U.S. 151 (1929)

49 S.Ct. 291, 73 L.Ed. 647

Ithaca Trust Co.

v.

United States

No. 267

United States Supreme Court

April 8, 1929

Argued February 27, 1929

CERTIORARI TO THE COURT OF CLAIMS

Syllabus

1. Where a will makes bequests to charities, to be paid after the death of the testator's wife from a residuary estate bequeathed to her for life, and allows the wife to use from the principal any sum "that may be necessary to suitably maintain her in as much comfort as she now enjoys," and the income of the estate at the death of the testator, after paying specific debts and legacies, is more than sufficient to maintain the widow as required, her authority to draw on the principal, being thus limited by a standard fixed in fact and capable of being stated in definite terms of money, does not render the value of the charitable bequests so uncertain as to prevent their deduction from gross income, under § 403(a)(3) of the Revenue Act of 1918, in computing the estate tax. P. 154.

2. The estate tax being on the act of the testator, and not on the receipt of property by legatees, the estate transferred is to be valued as of the time of the testator's death. P. 155.

3. Therefore, the value of a life estate is to be determined on the basis of life expectancy as of that time, even though the life tenant died before the time came for computing and returning the tax. Id.

64 Ct.Cls. 686 reversed.

Certiorari, 278 U.S. 589, to review a judgment for the United States in a suit brought by the Trust Company to recover money collected as estate taxes.

Page 153

HOLMES, J., lead opinion

MR. JUSTICE HOLMES delivered the opinion of the Court.

This is a suit to recover the amount of taxes alleged to have been illegally collected under the Revenue Act of 1918, February 24, 1919, c. 18; 40 Stat. 1057, in view of the deductions allowed by § 403(a)(3), 40 Stat. 1098. The Court of Claims denied the claim, 64 Ct.Cls. 686, and a writ of certiorari was granted by this Court.

Page 154

On June 15, 1921, Edwin C. Stewart died, appointing his wife and the Ithaca Trust Company executors and the Ithaca Trust Company trustee of the trusts created by his will. He gave the residue of his estate to his wife for life, with authority to use from the principal any sum "that may be necessary to suitably maintain her in as much comfort as she now...

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