The opinion of the court was delivered by: LORD, JR.
JOHN W. LORD, Jr., Chief Judge.
This is a civil action by the United States of America to reduce to judgment certain federal income tax assessments against Robert N. St. Mary (hereinafter sometimes Taxpayer), and Margaret E. St. Mary; to set aside certain conveyances by the Taxpayer of his 50 percent interests in the stock of both Rosslyn Realty Company and Lehigh Valley Development Company to Lucille S. St. Mary; and to foreclose tax liens thereon.
After a four day trial to the Court sitting without a jury, briefs were ordered. Upon consideration of the testimony and the learned briefs submitted by both counsel, the Court enters the following:
1. On February 18, 1966, a delegate of the Secretary of Treasury made timely assessments against Robert N. St. Mary and Margaret E. St. Mary for unpaid federal income taxes and interest for the years 1960 through 1962 in the amounts of $139,915.90.
3. Notices of these liens were filed in Lehigh County, Pennsylvania, on May 17, 1966, and in Northampton County, Pennsylvania, on May 18, 1966, with respect to the assessments for 1960 through 1962, and in Lehigh County, Pennsylvania, on September 8, 1966, with respect to the assessment for 1963.
4. Taxpayer died on May 25, 1969, and his first wife, Margaret E. St. Mary was substituted as defendant herein in place of Robert N. St. Mary on January 12, 1971.
5. A consent judgment was entered against Margaret E. St. Mary, individually and as executrix of the estate of the Taxpayer, covering the tax liabilities enumerated in Findings One and Two, plus statutory interest stipulated to by counsel for the Government and Margaret E. St. Mary.
6. Robert P. Stoudt and H. E. Stoudt & Sons, Inc., failed to either answer the amended complaint or to appear and defend at the time of the trial in this matter, and a default judgment was taken against them at that time.
7. Prior to June 6, 1965, Taxpayer was the owner of a 50 percent stock interest of Lehigh Valley Development Company, and of a 50 percent interest in the stock of Rosslyn Realty Company.
8. For several years prior to June 6, 1965, Taxpayer's tax returns were being audited by the Internal Revenue Service, and as a result, a deficiency was proposed by the investigating agent on June 4, 1965, in the amount of $109,000.00, which did not include interest.
9. Although Taxpayer's wife had instituted proceedings for child support, and Taxpayer was aware of this, he sold his 50 percent interest in a Nightingale Nursing Home and had the monthly income derived from the sale paid into the inactive Hamburg Realty Corporation, in order to prevent his creditors from attaching his share of the proceeds of the sale.
10. For a number of years prior to June, 1965, Taxpayer had incurred great indebtedness for hospitalization, lodging, plumbing bills, gasoline and miscellaneous items, and evidenced throughout not only a laxity in paying his bills, but an affirmative intent to avoid payment.
11. On or about January 5, 1965, Taxpayer, in connection with an unrelated tax matter in which he had failed to pay an employee's withholding taxes, filed a financial statement which indicated that his liabilities were far in excess of his assets.
12. For an extended period after 1963, Taxpayer experienced severe physical difficulties, which led to his being advised on numerous occasions by his physician that he would die.
12a. Taxpayer also developed emotional problems, as well as continuing to lead a totally disorganized financial life.
13. As a result of these facts, in late 1963, Lucille Schmuldt began to care for Robert N. St. Mary and to expend sums for his benefit.
13 (a). Lucille Schmuldt provided Taxpayer with food, clothing, medicines, housing and spending money, from late 1963 to June of 1965.
14. On June 6, 1965, Taxpayer transferred his 50 percent interest in Lehigh Valley Development Company and his 50 percent interest in ...