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Blair v. Commissioner

Citation. Blair v. Commissioner, 300 U.S. 5, 57 S. Ct. 330, 81 L. Ed. 465, 37-1 U.S. Tax Cas. (CCH) P9083, 18 A.F.T.R. (P-H) 1132, 1937-1 C.B. 175, 1937 P.H. P1158 (U.S. Feb. 1, 1937)
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Brief Fact Summary.

A taxpayer assigned a right to trust income that he inherited in a will to his children. By doing so, the taxpayer claimed that he did not owe income tax on the portion assigned to his children.

Synopsis of Rule of Law.

Tax liability for income attaches to ownership.


A taxpayer, Petitioner, owned an income interest for life in a trust. Petitioner assigned a portion of his future income to his children. Petitioner did not pay income tax on the income assignment and the Government challenged this as improper.


Did Petitioner make a valid assignment of his interest in the trust in order to avoid federal income tax?


Chief Justice Hughes issued the opinion for the Supreme Court of the United States in holding that the assignment was valid and assignees became the owners of the income and the assignees were subject income taxes.


The Supreme Court found that Petitioners interest in the trust income was a transferable asset, and that income from an asset should be attributed to the one who owns it, which in this case was the assignees.

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