Estate of Morton W. Reed v. Commissioner , 8 T.C.M. 303 ( 1949 )

Estate of Morton W. Reed, Deceased, Grace R. Stratton, Executrix v. Commissioner.

Estate of Morton W. Reed v. Commissioner

Docket No. 11745.

United States Tax Court

1949 Tax Ct. Memo LEXIS 227; 8 T.C.M. (CCH) 303; T.C.M. (RIA) 49072;

March 29, 1949

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D. Nelson Adams, Esq., 15 Broad St., New York, N. Y., for the petitioner. Ellyne E. Strickland, Esq., for the respondent.

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MURDOCK

Memorandum Opinion

MURDOCK, Judge: The Commissioner determined a deficiency of $83,717.84 in estate tax. The petitioner contends that the Commissioner erred in including the value of an inter vivos trust in the gross estate under section 811 (c). The stipulated facts show that the trust gave the income for life to the decedent and expressly created a possibility of reverter of the trust corpus in the estate of the decedent. The decedent was in reality the grantor. This issue must be decided for the respondent upon the authority of (Jan. 17, 1949), and (Jan. 17, 1949).

The petitioner contends, in the alternative, that the value of the trust corpus should be reduced by certain expenses incident to the termination of the trust at the death of the decedent. The trust deed provided that the income of the trust should be paid to the decedent during his life and the trust should terminate at his death, at which time the corpus was to be paid to the remaindermen. The parties have stipulated that:

"The trust terminated with the death of the decedent, because of which the trust assets were subsequently distributed and the following items of expense were incurred by the trustee and paid out of the trust assets:

"(a) Trustee's principal commission in the amount of $4,701.97, paid November 13, 1946;

"(b) Attorneys' fees and disbursements with respect to the trustee's accounting in the amount of $1,530.50, paid November 13, 1946;

"(c) Federal and New York State stamp taxes in the amount of $503.08 on the delivery of the securities comprising the trust estate, paid November 18, 1946."

Such expenditures reduce the gross estate either as deductions or as exclusions. , affirmed ; .

Decision will be entered under Rule 50.