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41 B.T.A. 1266

McLean v. Commissioner

United States Board of Tax Appeals · decided 1940-05-28

- A transfer in trust with a possibility of reverter in the grantor is not a completed gift of the entire fund transferred.

Cited by 13 later decisions — most recently October 1951

2 federal appellate ·

Relies on Helvering v. Taylor · Bensel v. Commissioner · Wagegro Corp. v. Commissioner

Good law ✅— No negative treatment on recordhow we know

Decided 1940-05-28

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TURNER,

¶1dissenting: Tlie respondent determined that gifts had been made by petitioners of their entire interests in the funds transferred and computed deficiencies on the basis of their full value. The petitioners have shown that the determination was erroneous in part in that possibilities of reverter were retained and with respect to the possibilities of reverter there were no gifts. They have made no such showing with respect to all other interests in the funds. Regardless of that fact, however, the majority has reached the conclusion that the decision should be for no deficiency, remarking that perhaps the transfers effected completed gifts of life estates but that the determination was not made on that basis. As previously stated, the respondent determined that gifts had been made of the funds in their entireties and such a determination includes a determination of gifts of all component parts, life estates or interests in the said funds. It follows, in my opinion, that petitioners, on the record here, are entitled to be relieved of only such portions of the deficiencies as are attributable to the inclusion as a part of the gifts of the property interests represented by the possibilities of reverter. The petitioners having shown the deficiencies to be erroneous only in part, the entry of a decision that there are no deficiencies is no more defensible than would be the entry of a decision for the full deficiencies under the same circumstances, and it is well settled that the latter may not be done. See Taylor v. Helvering, 293 U. S. 507; Cohan v. Commissioner, 39 Fed. (2d) 540; Wagegro Corporation, 38 B. T. A. 1225; Estate of Frank L. Driver, Sr., 36 B. T. A. 246; affd., 100 Fed. (2d) 639.

¶2. It is my view that if the petitioners are entitled to the decisions indicated by the majority opinion it must be on the ground that each of the transfers was made in consideration of the other and does not therefore constitute a gift.

¶3I am unable to agree with the reasoning of the majority and accordingly express my dissent.

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