Jacob

This case presents four consolidated petitions for review of decisions of the United States Tax Court upholding the assessment of transferee liability against the petitioners under the provisions of § 311(a) (1) of the Revenue Act of 1936.

The assessments are based on deficiencies in income and excess profits taxes of the Central Holding Company, an 'Oregon corporation, for the fiscal year ending June 30, 1938. The petitioners are respectively the wife and the three daughters of Robert T. Jacob. Jacob himself is not a party to the proceeding.

In 1936 Jacob and two others, Conley and Barnes, organized the Central Holding Company which acquired a hotel at Burns, Oregon. Three hundred shares of the stock of the Holding Company were issued. Apparently these shares were to be divided equally among the three men, but because of the, insistence of a secured creditor of the corporation a majority of the shares were temporarily held by Jacob. The corporation operated the hotel for about a year or until it was destroyed by fire on July 17, 1937. The hotel had been insured in several companies and insurance in the total amount of $72,000 — -a. sum largely in excess of the cost of the…