Giannini

The administrator of the estate of Virgil D. Giannini, deceased, petitioned the Tax Court for a redetermination of an assessed deficiency in estate taxes. The Tax Court found a deficiency in the sum of $25,-515.86, and the administrator-taxpayer asks us to review the decision.

Prior to 1935 the Giannini family, composed of A. P. and Clorinda A., the mother and father, and their three children, L. M., Virgil D., and Clare Giannini Hoffman, owned all the stock in the Giannini Company, a corporation. During the year of 1935 the company was dissolved and its assets distributed to the stockholders. It was suggested by the father that the property distributed could be well handled by the formation of a family trust, and the father and mother thought such an arrangement would make financial provision for their children. Accordingly, the trust was formed about October 1, 1935, and the property in question, having a net value of $457,039.96, was transferred to it. Each of the three children contributed 9.25|% of the total value, or $43,284.62, while the remainder was contributed by their parents. The latter retained no interest in the trust

.According to the trust provisions the net…