473 F.2d 810 (8th Cir. 1973), 72-1195, Sohosky v. C. I. R.

Docket Nº:72-1195.
Citation:473 F.2d 810
Party Name:Henry W. SOHOSKY et al., Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Appellee.
Case Date:February 14, 1973
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 810

473 F.2d 810 (8th Cir. 1973)

Henry W. SOHOSKY et al., Appellants,

v.

COMMISSIONER OF INTERNAL REVENUE, Appellee.

No. 72-1195.

United States Court of Appeals, Eighth Circuit.

February 14, 1973

Submitted Nov. 14, 1972.

Page 811

L. Thomas Elliston, Webb City, Mo., for appellants.

Richard Halberstein, Atty., Tax Div., U. S. Dept. of Justice, Washington, D. C., for appellee.

Before GIBSON and LAY, Circuit Judges, and DURFEE, [*] Court of Claims Judge.

GIBSON, Circuit Judge.

Appellants appeal an adverse decision of the United States Tax Court reported at 57 T.C. 403.

The appellants (taxpayers) had sought to amortize a life estate per autre vie in certain corporate stocks as a wasting asset. The Commissioner found tax deficiencies in the amount of the deduction and that determination was found to be correct by the Tax Court in an opinion authored by the Honorable Bruce M. Forrester.

Taxpayers' 1 father, John Sohosky, Sr., died testate in 1963. At the time of his death he owned 1498 of the 1500 outstanding shares of The Lewis Motor Supply Company. The stock passed to his wife, Eva, for life with power of disposal in the residuary clause of the will, which read as follows:

"I give and bequeath all of the rest, residue and remainder of my estate, whether real, personal or mixed and wherever it may be situated to my wife, Eva Sohosky, for and during her life, with full power to sell or dispose of all or any part thereof as she may see fit during her lifetime. After her death, or if she should die first or concurrently with me, all of my estate, or all that may remain of my said estate, whether real, personal or mixed or [sic] wherever it may be situated, shall be divided equally among my four children, John J. Sohosky, Jr., Louis O. Sohosky, Henry W. Sohosky and Laura Virginia Emrich, per stirpes and not per capita."

Page 812

On April 1, 1965, the following agreement was made between Eva Sohosky as seller, and taxpayers, John, Jr. and Henry Sohosky, two of the three sons of Eva and John Sohosky, Sr., as buyers:

"Eva Sohosky, the Seller, does hereby sell, set over, transfer and convey unto the Buyers above named her life estate and her power of disposal in all of the shares of common stock of the Lewis Motor Supply Company and agrees to transfer said stock to the Buyers by endorsement and transfer of all stock certificates now registered in her name."

However, on May 14, 1966, the same parties entered into a second agreement which provided in pertinent part:

"Now Therefore it is agreed between the parties hereto as follows, to-wit:

"1. That the contract above described dated April 1st, 1965 be and is hereby cancelled and terminated and in lieu thereof the parties have now entered into the following agreements.

"2. The Seller agrees to sell and the Buyers agree to buy 1494 shares...

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