*828 Grantor of a short term trust in favor of his wife, held, taxable under section 22(a) of the Revenue Act of 1934. Helvering v. Clifford,309 U.S. 331">309 U.S. 331, followed.
*724 The Commissioner determined a deficiency in petitioner's income tax for the year 1934 in the sum of $3,232.13. The only issue is *725 whether or not the income of a short term trust established by petitioner in favor of his wife is taxable to petitioner under the provisions of section 22(a) of the Revenue Act of 1934.
FINDINGS OF FACT.
The Board's original memorandum opinion in this proceeding, entered June 12, 1939, held that income of a trust created by petitioner on December 29, 1930, for the benefit of his wife, Nannie C. Richter, was not taxable to petitioner under section 166 of the Revenue Act of 1934. Upon review the Circuit Court of Appeals for the Third Circuit affirmed the decision of the Board July 17, 1940. The Commissioner filed petition for certiorari, which the Supreme Court granted November 18, 1940.
*829 The review by the Supreme Court was limited to the question of whether the Circuit Court of Appeals properly disregarded the Commissioner's contention that petitioner was taxable upon the income of the aforementioned trust under section 22(a) of the Revenue Act of 1934, a contention which was not advanced by the Commissioner before the Board. On March 17, 1941, the Supreme Court rendered its decision, reversing the decision of the Circuit Court of Appeals with directions to such court to remand the cause to the Board for rehearing in the light of the Supreme Court's decision in . Pursuant to mandate of the Circuit Court of Appeals for the Third Circuit, this Board restored the proceeding to hearing calendar.
In due course the proceeding was heard and the cause is here presented upon the original stipulation of facts and a supplemental stipulation of facts presented at the rehearing. The facts are adopted as stipulated. Only those facts necessary for discussion of the issue presented are set forth herein.
Petitioner was a resident of Pittsburgh, Pennsylvania, in the taxable year and his Federal income tax return for that*830 year was filed with the collector there.
Petitioner created a trust on December 29, 1930, naming the Union Trust Co. of Pittsburgh, Pennsylvania, trustee, and his wife, beneficiary. The trust was to terminate on January 3, 1936, or upon the prior death of petitioner or his wife. Petitioner retained the right to revoke the trust with the written consent of the wife by notice in writing to the trustee. By amendment to the trust instrument dated June 3, 1932, petitioner extended the specific termination date of the trust to January 3, 1938. The corpus, upon termination of the trust, was to revert to petitioner. Petitioner's wife died November 26, 1935.
*726 OPINION.
ARUNDELL: This proceeding is here under mandate of the Circuit Court of Appeals for the Third Circuit, as directed by the Supreme Court that we determine whether income of the trust created by petitioner on December 29, 1930, is taxable to petitioner under section 22(a) of the Revenue Act of 1934 in the light of .
We are of the opinion that the instant case can not be validly distinguished from *831 , in which the Supreme Court held that the grantor of a short term trust in favor of the grantor's wife was taxable on the income of the trust on the ground that he remained substantially the owner of the trust corpus. There the trust was for a term of five years, the grantor was sole trustee, and extremely broad powers to control over the trust corpus were vested in the grantor. The trust here under consideration was of short duration, was in favor of petitioner's wife, and might be revoked by petitioner with the written consent of his wife. The fact that a trust company rather than petitioner was trustee is not sufficient to take the case out of the ambit of the Clifford case. ; .
The trust here differs from the one considered in the Clifford case in another respect, in that petitioner retained and exercised no control over the trust during its existence. We believe, however, that the short term of the trust (approximately five and one-half years) and the close family relationship of petitioner and the beneficiary*832 are sufficient to cause the trust income to be taxed to petitioner under section 22(a). A like interpretation of substantially similar facts was made by the Circuit Court of Appeals for the Second Circuit in , and . See also , in which we stated that "In the case of a family trust of short duration, where the corpus of the trust is to return to the grantor upon the expiration of a few years, the degree of control held by the grantor is unimportant." In any event, it should be noted that petitioner here had a measure of control over the trust by virtue of his relationship to the beneficiary and his reserved right to terminate the trust upon her written consent.
Because of computation necessary to reflect the allowance, pursuant to stipulation, of a credit for foreign taxes paid by petitioner in the sum of $112.50,
Decision will be entered under Rule 50.