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    Helvering V Horst Digest

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    Charlene Dacara
    Helvering v. Horst involved a taxpayer who detached interest coupons from bonds he owned and gifted them to his son before the coupons matured. The Supreme Court held that gifting the interest coupons was equivalent to realizing the income from the bonds himself. By disposing of the right to income, the taxpayer received the economic benefit of that income and it was therefore taxable to him, not his son. The Court found that one should not be able to avoid paying tax on income by gifting or transferring earnings to another party.

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    Helvering V Horst Digest

    Uploaded by

    Charlene Dacara
    46 views1 page
    Helvering v. Horst involved a taxpayer who detached interest coupons from bonds he owned and gifted them to his son before the coupons matured. The Supreme Court held that gifting the interest coupons was equivalent to realizing the income from the bonds himself. By disposing of the right to income, the taxpayer received the economic benefit of that income and it was therefore taxable to him, not his son. The Court found that one should not be able to avoid paying tax on income by gifting or transferring earnings to another party.

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    Helvering v. Horst involved a taxpayer who detached interest coupons from bonds he owned and gifted them to his son before the coupons matured. The Supreme Court held that gifting the interest coupons was equivalent to realizing the income from the bonds himself. By disposing of the right to income, the taxpayer received the economic benefit of that income and it was therefore taxable to him, not his son. The Court found that one should not be able to avoid paying tax on income by gifting or transferring earnings to another party.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    46 views1 page

    Helvering V Horst Digest

    Uploaded by

    Charlene Dacara
    Helvering v. Horst involved a taxpayer who detached interest coupons from bonds he owned and gifted them to his son before the coupons matured. The Supreme Court held that gifting the interest coupons was equivalent to realizing the income from the bonds himself. By disposing of the right to income, the taxpayer received the economic benefit of that income and it was therefore taxable to him, not his son. The Court found that one should not be able to avoid paying tax on income by gifting or transferring earnings to another party.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Helvering v.

    Horst
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    Citation. 311 U.S. 112, 61 S. Ct. 144, 85 L. Ed. 75, 1940 U.S.

    Brief Fact Summary. Respondent owned negotiable bonds. In 1934 and 1935 he detached
    interest coupons from them and gave them to his son.

    Synopsis of Rule of Law. The power to dispose of income is the equivalent of ownership of it.

    Facts. Respondent, the owner of negotiable bonds, detached from them negotiable interest
    coupons before their due date and gave them to his son. His son collected them at maturity in
    the same year. The Commissioner ruled that the interest payments were taxable to
    Respondent. The Board of Tax Appeals sustained the tax and the Court of Appeals reversed.

    Issue. Whether the gift of interest coupons detached from the bonds is the realization of income
    taxable to the donor?

    Held. Justice Stone issued the opinion for the Supreme Court in reversing the Court of Appeals
    and holding that the income should be Respondents.

    Dissent. Justice Reynolds issued a dissenting opinion joined by the Chief Justice and Justice
    Roberts, but it is omitted from the text.

    Discussion. The Supreme Court found that Respondent enjoyed the economic benefits of the
    income as though he was transferring earnings. He should not be able to avoid including these
    amounts as income by converting it to a gift for his son. Similarly, a donor who retains control of
    trust property is taxable on the income.

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