Taxation – Federal Estate Tax – Includibilty of Accumulated Income of Trust Where Corpus Included in Gross Estate
Decedent created eight inter vivos trusts for the benefit of his immediate family, reserving the power as trustee to invade the corpus in unusual circumstances for the benefit of the beneficiaries, and to accumulate all or part of the income and add it to the corpus. The Commissioner included both the corpus and the accumulated income in the decedent’s gross estate. The Tax Court held that the corpus was properly included, but not the accumulated income. On appeal by the Commissioner, held, affirmed. The accumulated income of the trusts should not be included in the decedent’s gross estate as it was not “property … of which the decedent has at any time made a transfer” within the language of the taxing statute. Commissioner v. McDermott’s Estate, (7th Cir. 1955) 222 F. (2d) 665.