Cerf v. Commissioner

¶1dissenting: The renewal commissions under the general agency insurance contract here were taxable to petitioner’s husband as his income — no matter when, or to whom they were actually paid. Helvering v. Eubank, 311 U. S. 122. Under that decision, I think, for tax purposes all that the husband could have done and did do in 1928 with reference to future renewal commissions was to promise to make a gift of them to the trusts for the wife after he received them. In 1932 when the contested gift from petitioner to her husband was made he had, of course, not received renewal commissions due after that time and therefore had made no gift of them. Petitioner could not give that which she did not have. Thus it would follow that the majority is wrong in using those contingent future commission payments to the trust as an element in computing the value of any right petitioner, as beneficiary of the trust, may have given back to her husband. Otherwise, it would seem the husband would be taxable not only upon the full amount of these payments as and when made, but upon a value for his right to receive them at the time the insurance contract under which they were paid to the insurer was delivered. Eespondent did not attempt to go that far even in the Eubank case.