Cranston v. Good

The taxpayers, as executors of the will of Cornelia Wheeler Good, appeal from an order overruling objections and fixing an additional inheritance tax pursuant to section 13441 of the Revenue and Taxation Code.

Appellants contend that the lower court’s interpretation of section 13441 of the Revenue and Taxation Code is erroneous and contrary to legislative intent and that the statute is unconstitutional.

The facts are not in dispute. Cornelia Wheeler Good died on March 30, 1958, leaving an estate appraised at a little over $2,000,000. In May 1957, she had made gifts totaling over $1,000,000 to her three children, who are also the beneficiaries under the will. Appellants, as executors, filed California and federal gift tax returns for the decedent and paid the respective gift taxes. Appellants considered that the 1957 gifts were made in contemplation of death and thus reported these gifts as such in the California inheritance tax affidavit and federal estate tax return. Therefore, the property on which the 1957 gift taxes had been paid was also subject to California death taxes and included in the estate for federal estate tax purposes. Both the Revenue and Taxation Code (§14059)…