The above proceedings were, by agreement, consolidated and heard together and involve deficiencies in income tax in the case of Ronald De Reuter, for the calendar year 1923 in the sum of $1,470; in the case of Henrietta D'Aramon, for the calendar year 1923 in the sum of $630; and in the case of Sybil Whitehouse, for the calendar year 1921 in the sum of $920.79. These deficiencies arise by reason of the fact that the Commissioner included in gross income for each petitioner, a certain annuity bequeathed to petitioner by the will of James Gordon Bennett. Petitioner Sybil Whitehouse further contends that the Commissioner erred in not permitting the deduction of certain death taxes paid by the estate of James Gordon Bennett to the States of New York, New Jersey, and Rhode Island. In a brief filed in behalf of said petitioner, this last contention has been withdrawn.
FINDINGS OF FACT.
The petitioner, Ronald De Reuter, is a nonresident alien, a citizen of France, and resides at 37 Avenue d'Iena, Paris, France. Petitioner Henrietta D'Aramon is a nonresident alien, a citizen of France, resident at No. 1 Boulevard La Tour, Maubourg, Paris, France. Petitioner Sybil Whitehouse is a resident of the City of Newport, R. I., and her principal place of business is at Stone Villa, Newport, R. I.
James Gordon Bennett, a citizen of the United States and a resident of the State of New York, died in the Republic of France, May 24, 1918, leaving a last will and testament, the material portions of which are:
THIRD: I give and bequeath to my wife MAUD an annuity of Fifty thousand dollars to be paid to her in equal quarterly payments in each year during her life reckoning the years from the time of my death and I hereby declare that this provision is made to her in lieu of her dower and right of dower in all my real estate situated in the State of New York or elsewhere in the United States of America.
FOURTH: I give and bequeath unto my sister JEANNETTE BELL the sum of Fifty thousand dollars and make no further provision for her because she is already amply provided for.
FIFTH: I give and bequeath unto my nephew ISAAC BELL an annuity of Thirty thousand dollars, to be paid to him in equal semiannual payments in each year during his life, reckoning the years from the time of my death.
SIXTH: I give and bequeath to my niece NORAH, wife of Major Ricardo, late of the British Army, an annuity of Ten Thousand dollars, to be paid to her personally and upon her individual receipt, in equal semiannual payments in each year during her life, reckoning the years from the time of my death.
SEVENTH: I give and bequeath to my niece HENRIETTA, wife of Count Paul D'Aramon, an annuity of Ten Thousand dollars, to be paid to her personally, and upon her individual receipt, in equal semiannual payments, in each year during her life, reckoning the years from the time of my death.
EIGHTH: I give and bequeath to my step-son RONALD DE REUTER an annuity of Twenty Thousand dollars to be paid to him in equal semiannual payments in each year during his life, reckoning the years from the time of my death.
NINTH: I give and devise absolutely and in fee simple, to SYBIL DOUGLAS, wife of William Whitehouse, my Cottage or stone Villa, consisting of a parcel of land and buildings thereon, situated at Newport, in the State of Rhode Island, known as "Stone Villa" to have and to hold the same to her, her heirs, and assigns forever; and if during my life I shall sell the said Cottage, then and in such case I give and bequeath unto the said SYBIL DOUGLAS, wife of William Whitehouse a sum equal to the amount for which I shall have sold the said Cottage.
TENTH: I also give and bequeath to the said SYBIL DOUGLAS wife of William Whitehouse, an annuity of Five thousand dollars.
By the eleventh to twenty-fifth clauses, inclusive, the testator bequeaths annuities ranging from $500 to $5,000 to various persons. Then follows:
All the above annuities mentioned in paragraphs ten to twenty-five of this my Will shall be paid in equal semiannual payments reckoning from the time of my death.
TWENTY-SIXTH: I give and bequeath unto each and every one of my domestic servants who shall be in my employ at the time of my death, and to whom I do not give an annuity, a sum equal in amount to the amount of his or her wages for one year at the time of my death.
TWENTY-NINTH: It is my long-cherished intention and purpose and it is my will to establish a substantial, appropriate and permanent memorial to my father, the late JAMES GORDON BENNETT, the founder and for many years the proprietor of the "New York Herald," and therefore to that end and to effectuate my said intention and purpose, I direct the Executors of this my Will hereinafter named and such of them as shall qualify and the survivors and survivor of them and their successors and successor, as soon as practicable after my death and during the lives of ISAAC BELL and JAMES GORDON DOUGLAS and the life of the longest liver of them, to cause or procure to be incorporated a corporation to be named "THE JAMES GORDON BENNETT MEMORIAL HOME FOR NEW YORK JOURNALISTS" in memory of my father and for whom the same shall be a perpetual memorial, the general objects and purposes of which corporation, which shall, if possible, have perpetual existence, shall be to provide and maintain a suitable and comfortable home or to provide pecuniary aid for persons who shall have been employed for at least ten years upon or by or in connection with any daily newspaper or journal which is now or shall be hereafter regularly published in the Borough of Manhattan in the City of New York, and who shall by reason of old age, accident or bodily infirmity, and through lack of means be unable to care for themselves or need such home or aid, each of which persons shall be nominated and recommended for the benefits of such home or for such aid by the proprietor or owner or publisher of any such newspaper or journal (whether an individual or a corporation) and shall be approved and accepted by the Board of Directors of such home in its uncontrolled discretion, and which Board of Directors shall always in the selection, approval and acceptance of persons to receive the benefits of such home or such aid, give the preference to any person who shall be or shall have been employed by or associated with the New York Herald Company or The New York Herald Company Société Anonyme Francaise upon or in connection with either the New York or the European Edition of the New York Herald newspaper or the Evening Telegram Newspaper. The said Memorial Home Corporation shall establish and maintain a suitable building or suitable buildings and grounds and appurtenances to provide a home or homes for the persons so to be benefited or aided and may also aid any such person or persons by pecuniary or other contributions or by pensions or otherwise as its Board of Directors may, in its uncontrolled discretion, from time to time deem best. And I give, devise and bequeath all the rest, residue and remainder of all the estate and property real and personal and of every kind and nature and wheresoever situated which shall belong to me or be subject to my disposal at the time of my death, unto such THE JAMES GORDON BENNETT MEMORIAL HOME FOR NEW YORK JOURNALISTS CORPORATION so to be formed, when and as soon as the same shall be duly incorporated, to be used and applied for its corporate purposes; and all income of my said residuary estate and property which shall accrue after my death and until such Home Corporation shall be so duly incorporated and entitled to receive such residuary estate and property, I give and bequeath absolutely unto my friends EUGENE HIGGINS and RODMAN WANAMAKER and JAMES STILLMAN and to such of them as shall survive me. It is my desire and will that such Memorial Home Corporation shall own and as soon as the due administration of my estate shall permit, receive and that it shall hold as long as practicable all capital stock of The New York Herald Company and the New York Herald Company Société-Anonyme Francaise which shall belong to me at my death and form part of my residuary estate and property, and that by virtue of its ownership of such stock, it shall from time to time elect such persons as directors of said The New York Herald Company and said The New York Herald Company Société Anonyme Francaise as shall continue to manage each of said companies and conduct the business and publication and management of The New York Herald newspaper in both its New York and European editions and The Evening Telegram upon the same principles and traditions and with the same policy and in the same manner so far as practicable, as the same shall be conducted at the time of my death.
It is also my wish and hope and I request that the directors of said New York Herald Corporations shall so manage the business and affairs thereof as to accomplish such desire and to that end that they establish and set aside so much of the earnings and profits of said Corporations or either of them as shall provide reserve or surplus funds sufficient in their judgment to provide for all possible contingencies of the business and to maintain the high standard, efficiency, independence, and wide influence of the newspapers published by said Corporation, and if deemed desirable to that end, to reduce the selling price of any of said newspapers or the charges for...
