United States v. Drescher
United States Court of Appeals for the Second Circuit
179 F.2d 863 (1950)
- Written by Kelsey Libby, JD
Facts
Drescher (plaintiff) was an officer at Bausch & Lomb Optical Company (the company). In 1939 and 1940, the company purchased two annuity plans for the benefit of its officers when they reached age 65. Drescher was a named annuitant. The company paid a one-time $5,000 premium for each policy and deducted those amounts at the time of payment as part of the compensation of its officers. Drescher’s compensation was not reduced due to the benefit. Once the policies were triggered, the annuitant received $54.70 per month under the 1939 policy and $44.80 per month under the 1940 policy for at least 120 months. The company retained possession of the contracts until the annuitants turned 65, and the annuitants had no power to accelerate the payments. The contracts also provided that neither they nor any payment could be assigned. The commissioner of internal revenue (defendant) included the cost of the annuity contracts as compensation to Drescher in the years that they were purchased. The district court ruled that Drescher had no income in 1939 or 1940 as a result of the annuity contracts. The commissioner appealed.
Rule of Law
Issue
Holding and Reasoning (Swan, J.)
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