First Victoria National Bank v. United States
United States Court of Appeals for the Fifth Circuit
620 F.2d 1096 (1980)
- Written by Daniel Clark, JD
Facts
Congress passed the Agricultural Adjustment Act of 1938, which annually created a national acreage allotment for rice. Individual states were given a portion of the annual allotment and directed to allocate it to their residents following one of several statutorily sanctioned schemes. Texas followed a scheme under which a rice producer who had produced rice in one of the previous five years would be granted an interest called rice history acreage. In a given year, a holder of rice history acreage was entitled to receive from the state an allotment of rice to produce. Rice history acreages were transferrable and devisable. T. J. Babb was a Texas rice producer in possession of a rice-history-acreage interest upon his death. At the time of Babb’s death, rice-history-acreage interests could be sold to third parties for cash. First Victoria National Bank (First Victoria) (plaintiff), the executor of Babb’s estate, did not list the rice history acreage as taxable property under Babb’s estate. The Internal Revenue Service (IRS) (defendant) determined that the rice history acreage was valuable property taxable as a portion of Babb’s estate and assessed a deficiency. First Victoria sued to recover the deficiency. The district court found for the IRS, and First Victoria appealed.
Rule of Law
Issue
Holding and Reasoning (Goldberg, J.)
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