Brief Fact Summary. Taxpayer Duberstein received a Cadillac from a long-time business acquaintance. At issue was whether the Cadillac was truly a gift or a payment in exchange for business information. Taxpayer Stanton received a large amount of money as a gratuity after he resigned his employment of 10 years with a church.
Synopsis of Rule of Law. The value of property acquired by gift is excluded from gross income.
Issue. Was the Cadillac a gift excludable from gross income?
Was the gratuity a gift excludable from gross income?
Held. Justice Brennan issued the opinion for the Supreme Court of the United States in holding that in Duberstein it was not error to consider the Cadillac as income and not a gift.
In Stanton, the Supreme Court found that the facts are not sufficient to make a determination and vacated the judgment and remanded for further proceedings.
Dissent. Opinions of Justices Harlan, Whittaker, Douglass, and Black are omitted from the text.
Justice Frankfurter issued a dissenting opinion on Stanton arguing that the Supreme Court only made the issue more confusing with its opinion. He believes previous cases already spelled out what should be considered by the courts.
Concurrence. Justice Frankfurter concurred in the judgment in Duberstein.
Discussion. The Supreme Court determined that the courts must take into consideration the intention of the one transferring the property. Ultimately, whether or not an item is a gift is a question of fact for the trier of fact. Further, appellate courts should not overturn a trier of fact’s determination unless it is clearly erroneous.