Monday, April 29, 2013

Corliss v. Bowers case brief

Corliss v. Bowers case brief
281 U.S. 376, 50 S. Ct. 336, 74 L. Ed. 916, 1930 U.S.

CASE SYNOPSIS: Petitioner sought review of a judgment of the Circuit Court of Appeals for the Second Circuit, which denied his request for the refund of a tax paid under §§ 219(g), 219(h) of the Revenue Act of 1924, 26 U.S.C.S. § 960, asserting the trust which he created for the benefit of his wife and children, but for which he retained the power to abolish or change, was not taxable.

FACTS: Petitioner sought review of a judgment, which denied his request for a refund of tax paid pursuant to §§ 219(g), 219(h) of the Revenue Act of 1924, 26 U.S.C.S. § 960, asserting that he should not have been taxed on trust created for the benefit of his wife and children. The court found that under the terms of the trust, petitioner reserved the power to abolish or change the trust at his will.

HOLDING:
The court held that under §§ 219(g) and 219(h), when the grantor of a trust had the power to re-vest in himself title to any part of the corpus of the trust, then the income of such part of the trust for such taxable year was to be included in computing the net income of the grantor. Accordingly, the judgment that denied petitioner's request for a tax refund was affirmed.

CONCLUSION: The judgment that denied petitioner's request for a tax refund was affirmed because when the grantor of a trust had the power to re-vest in himself title to any part of the corpus of the trust, the income of such part of the trust for such taxable year was to be included in computing the net income of the grantor.

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