Facts and Procedural History
Under Anthony N. Brady's will, a sixth of his estate would be held in trust for his granddaughter until she turned 21. During this period, her father would receive some of the income on this principal—in other words, he held an income interest in a testamentary trust for 15 years, with the remainder to his daughter.
The Collector viewed these payments as income, because they constituted the income on principal. Plaintiff argued they were exempt under §102(a) as property acquired by bequest.
He sued the Commissioner of Internal Revenue (Irwin) in the N.D.N.Y., which found for the plaintiff. The Second Circuit affirmed. The Commissioner appealed to the Supreme Court.
Read more about this topic: Irwin V. Gavit
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