Farid-Es-Sultaneh v. Commissioner case
brief
160 F.2d 812, 1947 U.S. App. 3403, 47-1
U.S. Tax Cas. (CCH) P9218; 35 A.F.T.R. (P-H) 1049
CASE SYNOPSIS: Petitioner sought review
of a decision of the United States Tax Court that upheld a decision
of the Tax Commissioner that determined that stocks petitioner
obtained pursuant to a pre-nuptial agreement were taxable for capital
gains.
FACTS: Petitioner executed a pre-nuptial agreement with her extremely wealthy, soon to be, new husband. The pre-nuptial agreement stipulated that petitioner was to receive a certain amount of shares in a corporation that was to be an ante-nuptial settlement in the event the parties divorced. Petitioner released all dower and other marital rights, including the right to her support. The parties ultimately did divorce. The Tax Commissioner determined that stocks petitioner obtained pursuant to a pre-nuptial agreement were taxable for capital gains. The Tax Court upheld that decision. Petitioner sought review.
FACTS: Petitioner executed a pre-nuptial agreement with her extremely wealthy, soon to be, new husband. The pre-nuptial agreement stipulated that petitioner was to receive a certain amount of shares in a corporation that was to be an ante-nuptial settlement in the event the parties divorced. Petitioner released all dower and other marital rights, including the right to her support. The parties ultimately did divorce. The Tax Commissioner determined that stocks petitioner obtained pursuant to a pre-nuptial agreement were taxable for capital gains. The Tax Court upheld that decision. Petitioner sought review.
HOLDING:
The court reversed holding that income
tax provisions were not to be construed as though they were in pari
materia with either the estate tax law or the gift tax statutes.
ANALYSIS:
Petitioner gave fair consideration in relinquishing her marital rights, which were worth far more that the stock.
CONCLUSION: The court reversed the capital gains tax assessment against petitioner ex-wife holding that petitioner gave fair consideration in relinquishing her marital rights, for the stock she received. Income tax provisions were not to be construed in pari materia with either the estate or gift tax statutes.
ANALYSIS:
Petitioner gave fair consideration in relinquishing her marital rights, which were worth far more that the stock.
CONCLUSION: The court reversed the capital gains tax assessment against petitioner ex-wife holding that petitioner gave fair consideration in relinquishing her marital rights, for the stock she received. Income tax provisions were not to be construed in pari materia with either the estate or gift tax statutes.
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