Estate of Humphrey v. Commissioner
United States Court of Appeals for the Fifth Circuit
162 F.2d 1 (1947)
- Written by Joe Cox, JD
Facts
In January 1941, Albert Humphrey and his wife each gave their two sons $40,000 in cash. The two Humphrey sons took the $80,000 they had been given, combined with another $80,000 of their own, and ran a business that, by Humphrey’s death in February 1942, had lost half of their $160,000 total capital. Humphrey’s estate at his death was valued at $185,475. The Commissioner of Internal Revenue (the commissioner) (defendant) included Humphrey’s $40,000 gift to his sons in his gross estate because it had been paid within three years of his death, and the commissioner assessed tax on it. Humphrey’s estate (plaintiff) filed suit in tax court, which ruled for the commissioner. However, the tax court did not make any finding of the value of the property transferred. The estate appealed, arguing that because transferred property was to be valued as of the time of the decedent’s death, at Humphrey’s death, his $40,000 gifts were worth only $20,000 and should be taxed accordingly.
Rule of Law
Issue
Holding and Reasoning (Sibley, J.)
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