493 F.2d 1225 - Schultz v. United States — 493 F.2d 1225

How this case has been cited

Cited by 18 later decisions — most recently May 2003

7 federal appellate ·

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

¶1Gilbert Hahn, Jr., Washington, D. C. (Daniel G. Grove, Mark B. Sandground and Amram, Hahn & Sandground, Washington, D. C., on brief) for appellant.

¶2Ann Belanger, Atty., Tax Div., U. S. Dept, of Justice (Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwaclcs and Jonathan S. Cohen, Attys., Tax Div., U. S. Dept, of Justice, and Brian P. Get-tings, U. S. Atty., on brief) for appellee.

¶3Before CLARK, Associate Justice,* HAYNSWORTH, Chief Judge, and CRAVEN, Circuit Judge.

¶5PER CURIAM:

¶6On February 17, 1965, the taxpayer gave forty-four shares of Jersey Shore Steel Company, a closely held corporation, to each of his three children, and to each of the three children of his brother, Charles. On the same day, Charles gave the same number of shares to each of his children and to each child of the taxpayer. Similar reciprocal transactions were effected on February 4, 1966, and February 14, 1967.

¶7The taxpayer claimed an annual $3,000 exclusion with respect to each year for each of the nephews and nieces. This claim was disallowed upon the basis that the primary purpose of the reciprocal transactions was for each brother to effect enlarged gifts to his own children.

¶8Relying on United States v. Estate of Grace, 395 U.S. 316, 89 S.Ct. 1730, 23 L.Ed.2d 332 (1969), the district court *1226held that “actual intent” was “immaterial” and that the only issue was the “nature and operative effect of the transfers themselves.” Thereupon, he directed a verdict for the government.

¶9 We need not reach the issue of whether this rule of Grace applies with equal force in the area of indirect gifts, for we hold that, on the facts of this case, a reasonable jury could have concluded only that the taxpayer intended to benefit his children, rather than those of his brother, by the gifts in question.

¶10Affirmed.