Bishop Trust Co. v. Commissioner

This is.a petition to review the United States Board of Tax Appeals Decision, upholding the Commissioner’s determination of a deficiency in the income tax return made by the petitioners for the trust estate, for the year 1932, in the sum of $712.51.

The stipulated facts show that Maude G. Young, resident of Hawaii, died testate in 1926, leaving two surviving children, the beneficiaries of the trust herein involved. After certain bequests, she willed the residue of her estate to petitioners, as trustees, directing certain payments to said children “each and every month in advance on the first day of the month, beginning as of the date of my death and making the first payment as soon as possible after my death.” The specific source (income or corpus) of such monthly payments was not designated. Upon the beneficiaries attaining a specified age, the trust was to terminate and “all the principal and accumulated income” was to be distributed to the two children in equal *878 shares. Provisions for various contingencies, not pertinent here, are not detailed. The trustees were further empowered “to pay to my daughter or son or to use and apply for her or his benefit prior to the…