Estate of DiMarco v. Commissioner
United States Tax Court
87 T.C. 653 (1986)
- Written by Daniel Clark, JD
Facts
The International Business Machines Corporation (IBM) administered a benefit program that entitled spouses of certain employees to survivor benefits payable in the event of an employee’s death. Employees had no power to opt out of the program and had no discretion as to how it was administered. Moreover, IBM had complete discretion to alter the program at any time. The exact amount of money that a surviving spouse would ultimately receive was dependent on the date of the employee’s death. Anthony DiMarco began as an employee at IBM in 1950. In 1953, Anthony married his wife, Joan. In 1979, Anthony died, and Joan received survivor benefits under the plan. The Internal Revenue Service (IRS) (defendant) treated the payment of the benefits as a taxable gift from Anthony to Joan. The IRS treated the value of the gift as equal to the amount that IBM paid to Joan as benefits. The IRS offered several rationales for this treatment. The IRS’s arguments partially relied on application of the open-transaction doctrine. That is, the IRS treated Anthony as having made a completed gift of the survivor benefits to Joan during his lifetime, but the IRS held valuation of the gift open until the amount Joan would receive was known. That amount was not knowable until Anthony’s death. Anthony’s estate (plaintiff) challenged the IRS’s imposition of gift tax in tax court.
Rule of Law
Issue
Holding and Reasoning (Sterrett, C.J.)
What to do next…
Here's why 832,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,500 briefs, keyed to 994 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.