Brief Fact Summary. Petitioner created a trust for his wife and children. He retained the power to revoke the trust at any time. At issue was whether or not he had to claim the income from the trust as his gross income.
Synopsis of Rule of Law. When the grantor of a trust has the power to take full ownership of any part of the corpus of the trust, then the income should be considered as grantor’s.
Issue. Should the trust income be considered Petitioner’s income?
Held. Justice Holmes issued the opinion for the Supreme Court of the United States in holding that income should be considered Petitioner’s.
If a man directed his bank to pay over income as received to a servant or friend, until further orders, no one would doubt that he could be taxed upon the amounts so paid.View Full Point of Law