United States v. Benedict et al., Trustees, et al. (338 U.S. 692)
U.S. Supreme Court · decided February 13, 1950 · Supreme Court Database (Spaeth)
- Citation
- 338 U.S. 692 · 70 S. Ct. 472
- Decided
- February 13, 1950
- Term
- October Term 1949
- Vote
- 5–3
- Majority author
- Justice Burton
- Issue area
- Federal Taxation
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Mr. Justice Burton delivered the opinion of the Court. The question presented is whether trustees, who, in 1944, permanently set aside a charitable contribution from gains realized upon the disposition of capital assets held for more than six months, were entitled, in computing the federal income tax of the trust, to deduct the full amount of the contribution, although only half of those gains were taken into account in computing net income. For the reasons hereafter stated, our answer is in the negative. The respondents are trustees of a trust created by the will of John E. Andrus. The will directs that the net income of the trust be divided into 100 parts, 55 to be paid to certain individual beneficiaries and 45 to the Surdna Foundation, Inc., a charitable corporation. Pursuant to those terms the trustees permanently set aside for the Foundation 45% of the trust’s net income for the fiscal year ended April 30, 1944, the period involved in this case. In their fiduciary tax return, the trustees reported ordinary net income of $240,567.73, and deducted from it, as a charitable contribution, the $108,255.48 (45% of that net income) which they had set aside for the Surdna Foundation. This was done under § 162 (a) of the Internal Revenue Code. The trustees also reported gains of $60,374.01 on the disposition of capital assets held for more than six months. Of these gains, they…
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