Early v. Commissioner

¶1dissenting: I respectfully dissent from the majority opinion herein on the ground that it does not appear to me the taxpayers have carried their burden of proof. In order that the taxpayers might amortize their basis in their interest in the trust estate, they must first have a basis. It is stipulated and found as .fact that the stock of which they were in possession at the death of the decedent had a fair market value exceeding $2 million and that stock of that value was placed in the estate of the decedent in return for petitioners’ life interest in the trust estate. Nothing else in the way of basis is found to have been used to effectuate the settlement. In my view, the question then arises, did petitioners own a property right in the stock so transferred, the value of which could be used as a basis ? The eviden-tiary facts found seem to me to raise a serious question affecting petitioners’ claim to ownership of the stock at the death of the decedent. From such facts, it is at least as fair to conclude that Allen Early in holding the stock was acting in a trust capacity for the decedent and only as an agent as it is to conclude that he held it as a gift from decedent. To my way of thinking, the first hurdle petitioners had to surmount in their proofs was a negation of any such agency and clear proof either of a gift of the stock by the decedent or their acquisition of title and equitable ownership thereof in some other fashion. The mere fact, which is relied on by the majority, that Texas law makes it possible for the holder of stock powers to transfer bare legal title to an innocent purchaser without notice can in no way, without a showing of a donative intent on the part of decedent, constitute the transfer of either legal or equitable title to the stock to the petitioners. On the ■ facts as found, I can find no gift of the stock to them; therefore, no basis for their life interest in the trust, and it follows, nothing for them to amortize.