TAXATION-FEDERAL INCOME TAX-TAXATION TO SETTLOR OF INCOME FROM TRUST ESTABLISHED TO DISCHARGE A LEGAL OBLIGATION

Authors

Abstract

Shortly before the entering of a decree of absolute divorce in favor of his wife, a husband agreed to transfer securities in trust for the wife's benefit in lieu of alimony and all other claims. The divorce decree incorporated the trust agreement. On certiorari to the Circuit Court of Appeals for the Eighth Circuit, which had sustained a tax against the settlor on the income of the trust estate on the ground that it discharged a legal obligation, the Supreme Court of the United States affirmed the judgment. After disposing of the argument that the trust was entirely voluntary since created prior to the divorce, Chief Justice Hughes interpreted the provisions of the Revenue Act to allow the tax. Petitioner's contention that the beneficiary was the taxable person was denied on the basis of Gould v. Gould. Douglas v. Willcuts, (U.S. 1935) 56 S. Ct. 59.

Recommended Citation

TAXATION-FEDERAL INCOME TAX-TAXATION TO SETTLOR OF INCOME FROM TRUST ESTABLISHED TO DISCHARGE A LEGAL OBLIGATION, 34 Mich. L. Rev. 443 (1936).
Available at: https://repository.law.umich.edu/mlr/vol34/iss3/26