Commissioner v. Irving Trust Co.
United States Court of Appeals for the Second Circuit
147 F.2d 946 (1945)
- Written by Eric Miller, JD
Facts
Hugh Beugler set up an inter vivos trust that gave the trustee, Irving Trust Company (Irving) (plaintiff), the power to transfer trust principal to Beugler at Irving’s absolute discretion. The trust did not give Beugler any power to require payments to himself from the trust principal. No amount of the trust principal was ever paid to Beugler. After Beugler’s death, the Internal Revenue Service commissioner (defendant) included the trust in Beugler’s gross estate, reasoning that Beugler held a reversionary interest in the trust principal, thus subjecting it to the estate tax under the federal tax code in accordance with Internal Revenue Code (IRC) § 811. [Editor’s Note: This provision of the tax code is now § 2037.] Irving challenged this determination in the United States Tax Court, which held that the trust was not includable in Beugler’s gross estate. The commissioner appealed to the United States Court of Appeals for the Second Circuit.
Rule of Law
Issue
Holding and Reasoning (Hand, J.)
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