Robert C. Davis v. United States

The United States appeals' from a decision of the district court adjudging the taxpayer entitled to a refund of federal estate taxes paid in the sum of $604.84, plus interest. The controversy concerns the validity of Treasury Regulation § 20.2031-8(b) (l), which specifies how shares of an open-end investment company must be' valued for estate tax purposes. Jurisdiction of the district court was conferred by 28 U.S.C. § 1346 , and the case is properly before us under 28 U.S.C. § 1291 . The opinion of the district court is reported at 306 F.Supp. 949 (C.D.Cal.1969). We affirm.

On March 29, 1965, the date of the death of Isabelle Mildred Davis, she and her husband were owners in joint tenancy of 9,518 shares of Affiliated Fund, Inc., an open-end investment company or mutual fund. Such an organization sells shares in itself and with the proceeds engages in the business of investing, reinvesting and trading in securities. It continuously sells its shares to the public and must continually offer to redeem them. The selling price to the public, the “asked” or “offering” price, is the net asset value per share of the total securities owned by the company, plus a sales commission or…