Commerce Trust Company v. United States, 20129.

Decision Date03 February 1971
Docket NumberNo. 20129.,20129.
Citation438 F.2d 111
PartiesCOMMERCE TRUST COMPANY and Robert W. Willits, Executors of the Estate of William G. Parrott, Deceased, Appellees, v. UNITED STATES of America, Appellant.
CourtU.S. Court of Appeals — Eighth Circuit

Johnnie M. Walters, Asst. Atty. Gen., Lee A. Jackson, Loring W. Post, Kenneth L. Gross, Attys., Dept. of Justice, Washington, D. C., for appellant; Bert C. Hurn, U. S. Atty., Paul Anthony White, Asst. U. S. Atty., of counsel.

Richard M. Erickson, Frank H. Terrell, Guy A. Magruder, Jr., Kansas City, Mo., for appellees.

Before MATTHES, Chief Judge, HEANEY, Circuit Judge, and VAN PELT, Senior District Judge.


This appeal raises the single issue of whether Section 642(g) of the 1954 Internal Revenue Code prevents an estate from using expenses incurred in the selling of stocks and securities both as a deduction for estate tax purposes under Section 2053 of the Code and as an offset against the gross sale amount in computing capital gains and losses for estate income tax purposes. We hold that it does not.

The appeal evolved from an action brought in the United States District Court for the Western District of Missouri by the executors of an estate for recovery of federal income taxes paid by the estate. The material facts were stipulated to and are set in the decision of the District Court which granted summary judgment for the plaintiffs. Commerce Trust Company v. United States, 309 F.Supp. 1317 (W.D.Mo. 1969).

This precise issue was originally decided contrary to the government's position in Estate of Viola E. Bray, 46 T.C. 577 (1966), aff'd mem., 396 F.2d 452 (6th Cir. 1968) (relying on the opinion of the Tax Court). Most recently, the issue has created a flury of judicial activity. The resulting decisions have unanimously followed Bray in rejecting the government's position. Smith v. United States, 319 F.Supp. 174 (E.D. Mo., Oct. 28, 1970); Clapp v. United States, No. 70-524-HP, 70-2 U.S.T.C. ¶ 12,720 (C.D.Cal., Aug. 24, 1970), appeal authorized, 9th Cir., 717 CCH-Standard Federal Tax Reports 70,704; Wilson v. United States, No. 69-1237-F, 70-2 U.S.T.C. ¶ 12,714 (C.D.Cal., Aug. 28, 1970); Estate of Walter E. Dorn, 54 T.C. 1651 (1970), notice of appeal filed, 9th Cir., CCH-Standard Federal Tax Reports 70,705; Mercantile Safe-Deposit & Trust Company v. United States, No. 21316, 70-1 U.S.T.C. ¶ 9422 (D.Md., May 19, 1970); Kreher v. United States, 314 F.Supp. 409 (M.D.Fla., May 1, 1970), appeal docketed, No. 30,343, 5th Cir., Aug. 10, 1970, 717 CCH-Standard Federal Tax Reports 70,708.1

The court below closely reexamined the reasoning of the Bray decision and the most recent legislative history affecting Section 642(g). We think it correctly found the government's arguments wanting.2

For the reasons stated in the opinion of the lower court and in the opinion of the Tax Court in Estate of Viola E. Bray, supra, the judgment of the District Court is


1 The Commissioner has nonetheless announced that he will not...

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4 cases
  • United States Trust Co. v. IRS
    • United States
    • United States District Courts. 5th Circuit. Southern District of Mississippi
    • 28 de agosto de 1985
    ...the Code, the Court will not infer one. As the court noted in Commerce Trust Co. v. U.S., 309 F.Supp. 1317 (W.D. Mo.1969), Aff'd. 438 F.2d 111 (8th Cir.1971): If the Congress had intended to wipe out all double tax benefits it could have found appropriate language to accomplish that objecti......
  • Bridges v. Comm'r of Internal Revenue, Docket Nos. 6313-71
    • United States
    • United States Tax Court
    • 28 de agosto de 1975, attempts to allow the deductible amount only as an offset. Bray has been followed by two circuits. Commerce Trust Co. v. United States, 438 F.2d 111 (8th Cir. 1971); Estate of Marcellus L. Joslyn v. Commissioner, 500 F.2d 382 (9th Cir. 1971). Indeed, the Commissioner now recognizes th......
  • Long v. Comm'r of Internal Revenue , Docket No. 9088-76.
    • United States
    • United States Tax Court
    • 3 de outubro de 1978
    ...all double tax benefits, but is only a specific limitation against double deductions. 46 T.C. at 580. See also Commerce Trust Co. v. United States, 438 F.2d 111 (8th Cir. 1971), and cases cited therein. It is clear that the income tax benefit which respondent seeks to disallow here is not a......
  • Estate of Haase's, 75-815
    • United States
    • United States State Supreme Court of Wisconsin
    • 3 de janeiro de 1978 tax return." Bray at 46 T.C. 582. This same distinction between a deduction and a setoff was made in Commerce Trust Company v. United States, 438 F.2d 111 (8th Cir. 1971) and cases cited The effect of the Bray case was changed by P.L. 94-455, Sec. 2009(d), 90 Stats. 1896, amending 26......

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