Stark v. United States
United States Court of Appeals for the Eighth Circuit
477 F.2d 131 (1973)
- Written by Joe Cox, JD
Facts
Lera and William Stark (plaintiffs) gifted stock in a closely held corporation to three separate trusts, with their three minor grandchildren as beneficiaries. The trusts were to pay the net income to the beneficiaries until age 30, when each trust could then be terminated and the grandchildren could take the trust corpus. The stock of the corporation in question had never been publicly traded, and no dividends had been paid in at least twenty-three years. The Starks wished to claim the income from the stock as a present interest subject to the annual gift-tax exclusion established by Treasury Regulation § 25.2503-3(a), which was then $3,000. While the gift of the shares of stock was obviously a gift of a future interest and was not subject to the exclusion, the gift of income could be subject to the exclusion if it was established to be 1) a present interest and 2) of an ascertainable value. The government (defendant) did not dispute the first point but argued that the lack of public trading or dividend payments created a lack of ascertainable value. The Starks argued that the gift of income could be valued by use of the actuarial tables in the Treasury Regulations. The district court found otherwise, and the Starks appealed.
Rule of Law
Issue
Holding and Reasoning (Per curiam)
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