312 US 259 Powers v. Commissioner of Internal Revenue

312 U.S. 259

61 S.Ct. 509

85 L.Ed. 817


No. 486.

Argued Jan. 7, 1941.

Decided Feb. 3, 1941.

Mr. Ralph G. Boyd, of Boston, Mass., for petitioner.

Mr. J. Louis Monarch, of Washington, D.C., for respondent.

Mr. Justice DOUGLAS delivered the opinion of the Court.


The issue in this case is the same as that in Guggenheim v. Rasquin, 312 U.S. 254, 61 S.Ct. 507, 85 L.Ed. —-, decided this day. Petitioner in November and December, 1935, purchased single-premium policies of insurance on her own life and late in December, 1935, irrevocably assigned them as gifts. The Commissioner determined a deficiency, claiming that the value of the policies for gift-tax purposes was the cost of duplicating them at the dates of the gifts, not the cash-surrender value as reported by petitioner. The Board of Tax Appeals held that the value of the gifts was their cash-surrender value. The Circuit Court of Appeals reversed. 1 Cir., 115 F.2d 209. That judgment must be affirmed on the authority of Guggenheim v. Rasquin, supra, unless as claimed by petitioner the court below was precluded from substituting its judgment of value for that of the Board. Helvering v. Rankin, 295 U.S. 123, 131, 55 S.Ct. 732, 736, 79 L.Ed. 1343. But the question of what criterion should be employed for determining the 'value' of the gifts is a question of law. See Lucas v. Alexander, 279 U.S. 573, 49 S.Ct. 426, 73 L.Ed. 851, 61 A.L.R. 906. Accordingly, the Circuit Court of Appeals was justified in reversing the decision of the Board as 'not in accordance with law'. Int.Rev.Code 1939, § 1141(c)(1), 53 Stat. 164, 26 U.S.C.A. Int.Rev.Code, § 1141(c)(1).