Lehman v. Commissioner

*792OPINION.

Steknhagen :

The question for determination is whether the property which decedent conveyed to his children after the conference in January, 1922, is within his gross estate under section 402 (c), Revenue Act of 1921. That section expressly includes within the value of the gross estate any property of which decedent made a transfer in contemplation of death, and then lays down the following rule to facilitate the determination of the question whether a transfer was so made:

Any transfer of a material part of his property in the nature of a final disposition or distribution thereof, made by the decedent within two years prior to his death without such a consideration, shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this title.

The legal title to the property ivas transferred in 1922, and although petitioner suggests that as to some of the property this was but the confirmation of a gift long since made and, as to others, of a contractual transfer made earlier, the evidence is not sufficient to establish an equitable title before the deeds were delivered. At most the evidence indicates that the children understood that such a distribution would be made, and this is short of proof of a gift or transfer. The presumption is against it.

The petitioner urges that the deeds were not given in contemplation of death. Here again we find the proof insufficient. The statute lays down the rule that such a transfer as this is in the first instance to be regarded as made in contemplation of death. The Government has the presumption, and unless the estate can affirmatively prove the contrary, the property transferred is within the gross estate. If a fair consideration of the evidence does not overcome the presumption fixed by the statute, the tax attaches. It is not as if the Government were permitted or required to prove the transfer as having been *793made in contemplation of death. Under such a rule it would be necessary to consider the essentials of such a transfer, and unless they were present the property would be excluded. The statute has reversed this and said that it can only be excluded if “ shown to the contrary,” and thus the burden is thrown entirely on the taxpayer.

In our opinion the evidence does not show the transfers not to have been made in contemplation of death. The evidence is entirely consistent with the statutory presumption that they were so made, and we therefore leave the property within the gross estate where in the first instance the statute places it.

Judgment will'be entered for respondent on 15 days’ notice, wider Rule 50.