Commissioner v. Estate of Gidwitz

196 F.2d 813 (1952)

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Commissioner v. Estate of Gidwitz

United States Court of Appeals for the Seventh Circuit
196 F.2d 813 (1952)

JC

Facts

Jacob Gidwitz, who was 72 years old and had suffered a heart attack, made an irrevocable transfer of stock valued at $140,610 to a trust to equalize the holdings of his sons. The trust received both ownership of the stock and a separate right to receive the income on that stock. The sons could not enjoy the trust property during Gidwitz’s life, and Gidwitz’s transfer of stock was acknowledged to be a transfer in contemplation of death, or causa mortis. At the time of Gidwitz’s death, the total assets of the trust had a valuation of $341,102.02. The government (plaintiff) argued that the valuation should include not only the original value of $140,610 but also the stock income the trust received before Gidwitz’s death. Gidwitz’s estate (defendant) argued that only the original value of $140,610 should be included in the gross estate. While prior caselaw had established that the value to be included in the gross estate was the exact property transferred by the decedent, the question remained as to whether the value of the stock could be separate from the right to income from the stock into two separate gifts made by Gidwitz. The tax court found for the estate, and the government appealed.

Rule of Law

Issue

Holding and Reasoning (Swaim, J.)

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