United States v. Pelzer, No. 393

CourtUnited States Supreme Court
Writing for the CourtSTONE
Citation85 L.Ed. 913,312 U.S. 399,61 S.Ct. 659
PartiesUNITED STATES v. PELZER
Decision Date03 March 1941
Docket NumberNo. 393

312 U.S. 399
61 S.Ct. 659
85 L.Ed. 913
UNITED STATES

v.

PELZER.

No. 393.
Argued Jan. 7, 1941.
Decided March 3, 1941.

Messrs. Francis Biddle, Sol. Gen., and Robert H. Jackson, Atty. Gen., for petitioner.

Mr. Robert A. Littleton, of Washington, D.C., for respondent.

Mr. Justice STONE delivered the opinion of the Court.

Decision in this case turns on the question whether certain gifts of property in trust for the benefit of several beneficiaries are gifts of 'future interests' which, in the computation of the gift tax, are, by § 504(b) of the 1932 Revenue Act, 47 Stat. 169, 247, 26 U.S.C.A. Int.Rev.Acts, page 585, denied the benefit, otherwise allowed, of exclusion from the compu-

Page 400

tation to the extent of the first $5,000 of each gift 'made to any person by the donor' during the calendar year.

Sections 501(a) and 502(1) of the 1932 Act, 26 U.S.C.A. Int.Rev.Acts., page 580, impose for each calendar year a tax upon the net amount of transfers 'by any individual * * * of property by gift'. For the purpose of computing the tax § 504(b) provides 'In the case of gifts (other than of future interests in property) made to any person by the donor during the calendar year, the first $5,000 of such gifts * * * shall not * * * be included in the total amount of gifts made during such year'.

In 1932 the taxpayer, respondent here, created a trust for the benefit of his eight grandchildren and any other grandchildren who might afterward be born during the term of the trust. The trustee was directed to accumulate the income for a period of ten years and thereafter to pay an 'equal grandchild's distributive share' of the income to each of the named grandchildren who were then living and twenty-one years of age and to pay a like share of income to each other named grandchild for life after that child should reach the age of twenty-one years. Provision was made whereby grandchildren born after the creation of the trust and during its life were to receive like participation in the income of the trust except as to distributions of income made prior to the birth of such after-born grandchildren, and except that the after-born grandchildren should be paid their shares of the income during their respective minorities after the termination of the ten-year accumulation period. The trust instrument also made gifts over of the share of the income of each grandchild at death, the details of which are not now material. It was further provided that the trust should terminate twenty-one years after death of the last survivor of the named grandchildren, when the corpus of the trust, with accumulated income, was to be distributed in equal shares among

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the surviving grandchildren and the issue per stirpes of the deceased grandchildren.

During the years 1933, 1934, and 1935, the taxpayer added further amounts of property to the 1932 trust. In 1934 he also made gifts directly to his three granddaughters and created a trust to pay the income in equal shares to his wife and three daughters with gifts over of each share of the corpus of the trust upon the death of the life tenant.

Upon claims for refunds of overpaid taxes upon the transfers made in the years 1933, 1934, and 1935, the commissioner recomputed the tax and allowed one $5,000 exclusion only from the net amounts subject to gift tax given or added in each year to each trust. In the present suit, brought in the Court of Claims, respondent sought to recover overpaid taxes for the years in question on the grounds...

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233 practice notes
  • Helvering v. Stuart, Nos. 49 and 48
    • United States
    • United States Supreme Court
    • November 16, 1942
    ...deemed subject to state law 'unless the language or necessary implication of the section involved' so requires. United States v. Pelzer, 312 U.S. 399, 402, 403, 61 S.Ct. 659, 661, 85 L.Ed. 913. This decision applied federal definition to determine whether an interest in property was called ......
  • Doll v. Commissioner of Internal Revenue, No. 12773.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • May 11, 1945
    ...197, 200. 2 Same citations as in note 1. 3 Helvering v. Stuart, 317 U.S. 154, 161, 63 S.Ct. 140, 87 L.Ed. 154; United States v. Pelzer, 312 U.S. 399, 402, 61 S.Ct. 659, 85 L.Ed. 913; Lyeth v. Hoey, 305 U.S. 188, 194, 59 S.Ct. 155, 83 L.Ed. 119, 119 A.L.R. 410. 4 Putnam's Estate v. Commissio......
  • Heiser v. Woodruff, No. 496
    • United States
    • United States Supreme Court
    • April 22, 1946
    ...Realization Corporation v. Geist, supra, 316 U.S. 95, 96, 62 S.Ct. 982, 983, 86 L.Ed. 1293 and cases cited; cf. United States v. Pelzer, 312 U.S. 399, 402, 403, 61 S.Ct. 659, 660, 661, 85 L.Ed. 913. It is true that a bankruptcy court is also a court of equity, Local Loan Co. v. Hunt, 292 U.......
  • Fernandez v. Wiener, No. 58
    • United States
    • United States Supreme Court
    • December 10, 1945
    ...and cases cited. And see Cahn, Local Law in Federal Taxation, 52 Yale L. Journ. 799. Yet that is not always so. United States v. Pelzer, 312 U.S. 399, 61 S.Ct. 659, 85 L.Ed. 913. Taxation is eminently a practical matter. Congress need not be circumscribed by whatever lines are drawn by loca......
  • Request a trial to view additional results
233 cases
  • Helvering v. Stuart, Nos. 49 and 48
    • United States
    • United States Supreme Court
    • November 16, 1942
    ...deemed subject to state law 'unless the language or necessary implication of the section involved' so requires. United States v. Pelzer, 312 U.S. 399, 402, 403, 61 S.Ct. 659, 661, 85 L.Ed. 913. This decision applied federal definition to determine whether an interest in property was called ......
  • Doll v. Commissioner of Internal Revenue, No. 12773.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • May 11, 1945
    ...197, 200. 2 Same citations as in note 1. 3 Helvering v. Stuart, 317 U.S. 154, 161, 63 S.Ct. 140, 87 L.Ed. 154; United States v. Pelzer, 312 U.S. 399, 402, 61 S.Ct. 659, 85 L.Ed. 913; Lyeth v. Hoey, 305 U.S. 188, 194, 59 S.Ct. 155, 83 L.Ed. 119, 119 A.L.R. 410. 4 Putnam's Estate v. Commissio......
  • Heiser v. Woodruff, No. 496
    • United States
    • United States Supreme Court
    • April 22, 1946
    ...Realization Corporation v. Geist, supra, 316 U.S. 95, 96, 62 S.Ct. 982, 983, 86 L.Ed. 1293 and cases cited; cf. United States v. Pelzer, 312 U.S. 399, 402, 403, 61 S.Ct. 659, 660, 661, 85 L.Ed. 913. It is true that a bankruptcy court is also a court of equity, Local Loan Co. v. Hunt, 292 U.......
  • Fernandez v. Wiener, No. 58
    • United States
    • United States Supreme Court
    • December 10, 1945
    ...and cases cited. And see Cahn, Local Law in Federal Taxation, 52 Yale L. Journ. 799. Yet that is not always so. United States v. Pelzer, 312 U.S. 399, 61 S.Ct. 659, 85 L.Ed. 913. Taxation is eminently a practical matter. Congress need not be circumscribed by whatever lines are drawn by loca......
  • Request a trial to view additional results

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