Hall v. Wheeler
| Decision Date | 25 June 1959 |
| Docket Number | Civ. No. 5-189. |
| Citation | 174 F. Supp. 418 |
| Parties | Florence G. HALL, Executrix of the Estate of Frederick A. Hall v. Whitney L. WHEELER, Director of Internal Revenue. |
| Court | U.S. District Court — District of Maine |
Irving Isaacson, Lewiston, Me., for plaintiff.
Rufus E. Stetson, Jr., Tax Division, Dept. of Justice, Washington, D. C., Peter Mills, U. S. Atty., Elmer E. Runyon, Asst. U. S. Atty., Portland, Me., for defendant.
This is an action brought under 28 U.S.C.A. § 1346(a)(1) to recover the sum of $1,367.10 of Federal estate tax, with interest, alleged to have been erroneously assessed and collected from plaintiff. By agreement of the parties the matter has been submitted to the Court for decision and judgment upon the pleadings and a stipulation of facts.
The only question presented is whether or not the proceeds of a certain life insurance policy were properly included in the gross estate of plaintiff's decedent for Federal estate tax purposes pursuant to the provisions of Section 811(g)(2) of the Internal Revenue Code of 1939, 26 U.S.C.A. (I.R.C.1939) § 811(g)(2), Section 404(a) of the Revenue Act of 1942, 56 Stat. 944 (1942).
The insurance policy which is the subject of the present litigation was issued on June 5, 1940 on the application of Frederick A. Hall, plaintiff's decedent. It insured the life of the decedent in the amount of $5,000. The named beneficiary of the policy was Hall & Knight Hardware Company (hereinafter called the "Company"), a Maine corporation, of which the decedent was president. The policy reserved to the decedent the right to change the beneficiary, to assign the policy, to surrender or cancel the policy, to pledge the policy for a loan and to withdraw its cash surrender value.
From the date of issuance of the policy until the decedent's death on June 29, 1954, the Company retained physical possession of the policy; carried the policy on its books as a corporate asset; paid the premiums due on the policy and never credited such payments to the decedent in any way on its books. At the death of the decedent the proceeds of the policy, which amounted to $5,028.10, were paid to the Company.
Defendant subsequently determined that the proceeds of the policy should be included in the estate of the decedent and assessed additional Federal estate tax in the amount of $1,367.10 on decedent's estate, which was paid by plaintiff. Upon disallowance of her claim for refund, plaintiff instituted this action.
It is the position of defendant that the proceeds of the policy are includable in the decedent's gross estate for Federal estate tax purposes because he reserved the right to change the beneficiary and therefore possessed at his death one of the "incidents of ownership, exercisable either alone or in conjunction with any other person" within the meaning of Section 811(g)(2)(B) of the 1939 Code.
Section 811 of the 1939 Code reads in pertinent part as follows:
Section 81.27 () of Treasury Regulation 105, promulgated under the 1939 Code, provides in part as follows:
The language of this regulation is almost identical with that of the Committee Reports on the Revenue Act of 1942, which added Section 811(g) (2) (B) to the Code. See H.Rep. No. 2333, 77th Cong., 2d Sess., pp. 162-163; S.Rep. No. 1631, 77th Cong., 2d Sess., pp. 234-235 (1942).
The statute and the regulation apply directly to the facts of the instant case. The policy in terms expressly reserved to the decedent the right to change the beneficiary. Such a right is conceded to be an "incident of ownership" within the meaning of Section 811(g)(2)(B). See Farwell v. United States, 7 Cir., 1957, 243 F.2d 373, 377-388; Singer v. Shaughnessy, 2 Cir., 1952, 198 F.2d 178, 181; Fried v. Granger, D.C.W.D.Pa.1952, 105 F.Supp. 564, 567-568, affirmed per curiam, 3 Cir., 1953, 202 F.2d 150. Since the decedent at no time...
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Landorf v. United States
...United States, 122 F.Supp. 677, 129 Ct.Cl. 264 (1954), cert. denied, 348 U.S. 942, 75 S.Ct. 363, 99 L.Ed. 737 (1955); Hall v. Wheeler, 174 F.Supp. 418 (S.D.Maine, 1959). It is, of course, possible for the assignee and the assignor to agree to revoke the assignment. If, however, this possibi......
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...denied, 305 U.S. 674, 59 S.Ct. 242; Fried v. Granger, 105 F.Supp. 564, 567, W.D.Pa., affirmed, 202 F.2d 150, C.A. 3rd; Hall v. Wheeler, 174 F.Supp. 418, 421, S.D. Maine; Farwell v. United States, 243 F.2d 373, 377-378, C.A. 7th; Singer v. Shaughnessy, 198 F.2d 178, 181, C.A. 2nd; Estate of ......
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...the terms of the policies. See also United States v. Rhode Island Hospital Trust Co., supra; Liebmann v. Hassett, 148 F.2d 247; Hall v. Wheeler, 174 F.Supp. 418; and Fried v. Granger, 105 F.Supp. 564, affirmed per curiam 202 F.2d 150. It is petitioners' main contention that the term ‘incide......
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United States v. Rhode Island Hospital Trust Company, 6618.
...6 Cir., 1965, 340 F.2d 829; Fried v. Granger, W.D.Pa., 1952, 105 F.Supp. 564, affirmed, 3 Cir., 1953, 202 F.2d 150; Hall v. Wheeler, D.Me., 1959, 174 F.Supp. 418; Estate of Collino v. Commissioner, 1956, 25 T.C. 1026. But where all of the evidentiary facts appear, we are faced with a questi......