Petition for Review from the United States Board of Tax Appeals.
Before BUFFINGTON, DAVIS, and THOMPSON, Circuit Judges.
This petition involves the amount of the transfer tax due on the estate of Walter Lippincott, who died testate in 1927. The petitioners are the executors of the estate.
Section 302 of the Revenue Act of 1926 (26 USCA § 1094) provides, in part:
"The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated -- * * *
"(c) To the extent of any interest therein of which the decedent has at any time made a transfer, * * * in contemplation of * * * his death. * * * Where within two years prior to his death, * * * the decedent has made a transfer or transfers, * * * of any of his property, * * * and the value or aggregate value, at the time of such death, of the property or interest so transferred to any one person is in excess of $5,000, then, to the extent of such excess, such transfer or transfers shall be deemed and held to have been made in contemplation of death within the meaning of this chapter. * * *"
On May 13, 1926, the decedent conveyed a considerable part of his real property to his daughter. He died ten months later, on March 2, 1927. The Commissioner of Internal Revenue determined that the value of the property conveyed to his daughter, less $5,000, should be included in computing the gross value of the estate as a transfer made in contemplation of death within the meaning of section 302 (c). The Commissioner evidently relied upon the second sentence of paragraph (c) in assessing the deficiency -- that is, since the transfers were made within two years of death, they were made in contemplation of death as a matter of law.
After the Commissioner's determination, but prior to the time that the petitioners brought their petition to the Board of Tax Appeals, the Supreme Court held that the two-year provision in section 302 (c) was unconstitutional. Heiner v. Donnan, 285 U.S. 312, 52 S. Ct. 358, 76 L. Ed. 772. The Board sustained the Commissioner's determination on the ground that the transfers were made in fact in contemplation of death under the terms of the first sentence in paragraph (c).
The petitioners believe that the duty of showing the Board that the transfers were made in contemplation of death was upon the Commissioner since he had made the assessment under an unconstitutional statutory provision and had not determined as a matter of fact that the conveyances were made in contemplation of death. He thus did not make out a prima facie case. The petitioners rely on First National Bank v. Commissioner, 63 F.2d 685, 693 (C.C.A. 1). We do not find it necessary to discuss the question other than to point out that in First National Bank v. Commissioner, there was neither proof that the Commissioner had determined as a fact that certain transfers within two years of death were in contemplation of death nor was there evidence before the Board on which the finding of that fact could be based.
The real question in this case is whether or not there is substantial evidence to support the finding of the Board that the transfers of the real property by the decedent to his daughter were in fact made in contemplation of death. There is no dispute as to the facts upon which the Board made its finding.
In 1922, the decedent, Walter Lippincott, was stricken by hemiplegia which resulted in paralysis of his left side. He was confined to his home for a month under the care of trained nurses. He was unable to walk without assistance and was usually in a wheel chair.
Prior to this attack, the decedent, who was wealthy, had employed a trained nurse because he liked to have some one near by to wait upon him. He managed his business affairs until his illness in 1922. After that his son-in-law, a physician, who, with his wife, resided next door to the decedent, attended to his financial matters.
The Board found that after the attack of hemiplegia his mind was clear and his disposition cheerful; he was driven daily in an automobile and enjoyed calling on his friends and receiving their visits, and that although he was in poor health and partially disabled, there was no appreciable change in his physical condition ...