*946 1. Where powers to revoke inter vivos trusts were vested only in the holders of interests nonadverse to the grantor, the cost basis to be used in computing gain or loss upon a disposition by the trustees of securities forming part of the trust corpora after the grantor's death is the same as it would have been in the hands of the grantor. Sec. 113(a)(3), Revenue Acts of 1934 and 1936. The exception to this rule laid down by section 113(a)(5) of those acts can not be applied, since the latter does not cover the instance where the power to revoke is vested in persons other than the grantor.
2. The holding period for each security disposed of begins with the date of the grantor's acquisition thereof and ends with the date of sale by the trustees. Revenue Acts of 1934 and 1936, sec. 117(c)(2).
*765 These duly consolidated proceedings are brought for the redetermination of deficiencies in income tax as follows:
| Taxpayer | Docket No. | Year | Deficiency |
| Minnie M. Fay Trust "A" | 98900 | 1935 | $633.18 |
| Minnie M. Fay Trust "C" | 98901 | 1935 | 641.65 |
| Minnie M. Fay Trust "S" | 98902 | 1935 | 642.49 |
| Minnie M. Fay Trust "A" | 99522 | 1936 | 363.27 |
| Minnie M. Fay Trust "C" | 99523 | 1936 | 143.04 |
| Minnie M. Fay Trust "S" | 99524 | 1936 | 284.27 |
*947 The common issues are whether the basis for computing gain or loss upon the sale of securities by the trusts is the cost of the securities to the grantor or the value of the securities at the date of the grantor's death, and whether for the purposes of sections 117(a) of the Revenue Acts of 1934 and 1936 the holding period of the securities is to be computed from the date of purchase by the grantor, from the date of death of the grantor, or from the date the grantor transferred the securities in trust.
*766 FINDINGS OF FACT.
Petitioners are trustees of three trusts known as Minnie M. Fay Trusts "A", "C", and "S."
On March 24, 1932, Charles E. Fay (hereinafter referred to as "the grantor") created three trusts, the net income from each of which was to be paid to his wife, Minnie M. Fay, during her life. The corpus could also be paid over to her in whole or in part in the discretion of the trustees. Upon her death the income of trust "A" was to be paid to the grantor's son, Allen M. Fay, during his life, the income of trust "C" was to be paid to the grantor's son, Charles N. Fay, during his life, and the income of trust "S" was to be paid to the grantor's son, Stuart*948 J. Fay, during his life. The corpus of each trust could, after the deatf of grantor's wife, be paid over to each son in the trustees' discretion, except that after the grantor's wife had been dead five years each son could be paid either income or principal upon his written demand. Upon the death of the survivor of the grantor's wife and the respective son, the principal and income of the trust in question was to be paid over in various proportions to the son's widow and living issue, or, if neither the widow nor issue were then surviving, was to be divided among the other sons. If no son or issue of a deceased son were then living the fund was to be divided equally among the surviving widows of the deceased sons unless the grantor were then alive, in which case the grantor would receive two-thirds of the fund and the widows equal shares of the remaining one-third.
Clause seventh of each trust reads in part as follows:
I hereby create in JOHN F. TUFTS, my said son ALLEN M. FAY, and VIRGIL C. BRINK, of said Watertown, herein referred to as the Committee, a joint power exercisable at any time or times or from time to time by any two of said Committee by an instrument in writing*949 signed by them. * * * This Committee by two of its members shall have the power to do the following, and the following provisions shall apply to them:
A. To change and alter any of the trusts of said fund and declare new trusts of the property in any way or manner and to change and alter any and all the provisions of this instrument including the power to revoke and cancel any and all of said trusts and any or all of said provisions. * * *
It is agreed that the interest of Allen M. Fay in the disposition of the trust corpus was substantially adverse to the interest of Charles E. Fay, the grantor, and that the interests of John F. Tufts and Virgil C. Brink in the disposition of the trust corpus were not substantially adverse to the interests of Charles E. Fay, the grantor.
Charles E. Fay, the grantor of the trusts, died on May 19, 1932, at the age of 64 years. The corpora of the trusts were not returned as a part of the gross estate of the decedent. Respondent assessed a deficiency in estate tax of $5,541.69, which was paid by the estate. Part of the deficiency was due to the inclusion of the corpora of the three trusts *767 in the decedent's gross estate, on the*950 ground the trusts were created in contemplation of death. Suit for refund was instituted and compromised by an agreement as to the value of certain assets in the three trusts, which compromise resulted in a refund to the executors of $3,700 plus interest.
Each trust had as a part of its original corpus various securities which were purchased by the grantor at times and at prices set forth in the stipulations of fact filed in these proceedings, which are incorporated by reference as a part of these findings. Portions of these securities were sold by the trustees in the respective taxable years for prices likewise set forth in the stipulations.
OPINION.
LEECH: The principal issue in these proceedings is whether the basis for computing gain or loss upon the securities sold by petitioners as trustees in the taxable years is the cost of such securities to the grantor or the value of such securities at the time of the grantor's death.
Section 113(a)(3) of the Revenue Acts of 1934 and 1936 provides that if the property was acquired by an inter vivos transfer in trust after December 31, 1920, the basis shall be the same as it would be in the hands of the grantor. Section*951 113(a)(5) of the same acts contains an exception to this rule, as follows:
SEC. 113. ADJUSTED BASIS FOR DETERMINING GAIN OR LOSS.
(a) BASIS (UNADJUSTED) OF PROPERTY. - The basis of property shall be the cost of such property; except that -
* * *
(5) PROPERTY TRANSMITTED AT DEATH. - If the property was acquired by bequest, devise, or inheritance, or by the decedent's estate from the decedent, the basis shall be the fair market value of such property at the time of such acquisition. In the case of property transferred in trust to pay the income for life to or upon the order or direction of the grantor, with the right reserved to the grantor at all times prior to his death to revoke the trust, the basis of such property in the hands of the persons entitled under the terms of the trust instrument to the property after the grantor's death shall, after such death, be the same as if the trust instrument had been a will executed on the day of the grantor's death. * * *
It is not disputed that under these sections the grantor's basis is to be used even though the transfer in trust is in contemplation of death or to take effect at or after death, and indeed that has been so held. *952 ; . Both parties seem to agree, moreover, that the grantor would be taxable under section 166 of the Revenue Acts of 1934 and 1936 upon the income of the trusts, if that issue were now before us, because the power of revocation could be exercised by nonadverse *768 interests, namely, a majority of the three trustees, only one of which had a substantial adverse interest. We also assume without deciding that the grantor during his lifetime might have been taxed under section 22(a). . It may also be stated that the corpora of the three trusts would be includable in the grantor's gross estate on account of his retention of a possibility of reverter. .
None of the above mentioned income and estate tax principles contradict the juristic transfer of title from the grantor to the trustees. See . For the purposes of this case, they are not pertinent, since we are not concerned with the tax liability of the grantor*953 or his testamentary estate, but only with the basis to be used by the inter vivos trustees on a sale of capital assets, a transaction which gave rise to liabilities unconnected with the liabilities of the grantor or his estate.
The litigated question revolves solely about the second sentence of section 113(a)(5), supra. Petitioners say the statute must be construed literally and that, since there was no power of revocation reserved to the grantor of the trusts, the grantor's basis must be used. Respondent argues that Congress did not use the words of the statute in any narrow, restricted meaning, that the statute refers to instances wherein real control over the corpus is possessed by the grantor, and that there was no necessity to provide in section 113(a)(5) that a trust revocable by nonadverse interests was included in the classification of revocable trusts because it has always been considered that trusts so revocable effected no real transfer for tax purposes. See sections 166 and 167 of the Revenue Acts of 1934 and 1936 and section 302 of the Revenue Act of 1926.
So far as we have been able to discover, the instant question has not been decided, nor is there any*954 aid to the construction of the statute to be found in its legislative history. Even if such extrinsic evidence existed, there is no occasion for its use, for there is no ambiguity in section 113(a)(5). The intent of Congress, which is controlling upon us, is unequivocally expressed therein. The section plainly states that the fair market value of the property on the date of the grantor's death is to be used as the basis only where the right to revoke is reserved to the grantor. In all other instances in the revenue acts where the vesting of a power to revoke in a person other than the grantor is to have tax consequences there is a careful and explicit statement to that effect. See sections 166 and 167 of the 1934 Act and section 302 of the 1926 Act. The absence of such a qualification here in section 113(a)(5) contradicts, or, at least, fails to reveal any intent by Congress to cover transactions of the type at bar. As we held in *769 , "symmetry of the statute [Revenue Act of 1936] is not to be presumed."
The Board, moreover, may not add to the language of the revenue acts (*955 ). ; affd., ; .
Finally, the language of section 113(a)(5) is "with the right reserved to the grantor at all times prior to his death to revoke the trust." This is not only so carefully expressed as to be plainly differentiable from sections 166 and 167, but also the word "revoke" can not "suitably be applied to the act of termination by another." .
Inasmuch, then, as the right to revoke here is not reserved to the grantor, the basis to be used is the cost of the securities to the grantor under section 113(a)(3).
In view of the above conclusion, the second issue is quickly resolved. The holding period for each security disposed of begins with the date of the grantor's acquisition thereof and ends with the date of sale. Revenue Acts of 1934 and 1936, sec. 117(c)(2).
Reviewed by the Board.
Decisions will be entered for the petitioners.