*247 Decision will be entered under Rule 50.
Decedent in 1941 created a trust in which his sister was named life beneficiary. The trust provided that if decedent survived his sister the trust income was to be paid to him during his life. Upon the death of decedent and his sister there were remainders over. Decedent died in 1943 during the lifetime of his sister. Respondent included the value of the trust corpus, minus the value of the sister's life estate, in decedent's gross estate. Held, respondent erred in this determination. Estate of Charles Curie, 4 T. C. 1175, followed.
*604 Respondent determined a deficiency in Federal estate tax due from petitioner estate in the amount of $ 3,581.27. That part of the deficiency is here in issue which arises by reason of respondent's inclusion in decedent's gross estate of the value of the corpus of a trust created by decedent in 1941, less the value of the life estate therein of decedent's sister.
*605 FINDINGS OF FACT.
The petitioner's decedent on December 23, 1941, created a trust wherein his sister, Rose Straus, was designated as the primary or original beneficiary.
The trust agreement, which we incorporate herein by reference, contained the following provisions:
2. The entire net income from the trust estate, commencing at the date hereof, shall be paid to Rose Straus, the sister of the donor, for and during her natural life for her sole use and benefit, in installments as hereinabove stated. In the event, however, of the said Rose Straus predeceasing the said donor, Charles Nathan, then and in such event the net income shall be paid over by the trustees to the said donor, Charles Nathan, for and during his natural life for his sole use and benefit, *249 in installments as hereinabove stated.
3. Immediately upon the death of the said Rose Straus and Charles Nathan, any income which accrued prior to the death of said Rose Straus or Charles Nathan, and which was not paid over to them or to the survivor of them, as herein provided, during his or her lifetime by the trustees, shall become part of the corpus of the trust estate, and the said trustees shall divide said trust estate into two (2) equal shares or portions, and shall hold said shares or portions in trust, as hereinafter provided:
A.One of such equal parts or shares to my trustees, in trust nevertheless:
(a) To receive the net income therefrom, and during the lifetime of Gwendolyn Schoenstadt, the niece of the said donor, to pay the net income arising therefrom to the said Gwendolyn Schoenstadt, during her natural life, in installments, and upon her death, leaving issue her surviving, to divide the same into equal shares among her issue then surviving, "per stirpes" and not "per capita", and to hold the respective shares separately, or the whole, if there be but one child, in trust, and to apply the net income for the use of the child for whom such share shall be so separately*250 held, until such child shall attain the age of twenty-one (21) years, and then to pay over, transfer and assign to such child the principal of such share.
* * * *
B.One of such equal parts, or shares, to my trustees, in trust nevertheless.
(a) To receive the income therefrom, and during the lifetime of Stanley Straus, nephew of said donor, to pay the net income arising therefrom to him during his natural life, in installments. In case such net income shall be less than the sum of Sixty Dollars ($ 60.00) per month, then I direct said trustees to pay to him such sum or sums from the principal of said trust estate so that he shall be in receipt of a minimum income from the trust estate of Sixty Dollars ($ 60.00) per month. If during the lifetime of the said Stanley Straus, the net income which he shall receive shall, in the judgment of the said trustees, be insufficient by reason of illness, misfortune or other emergency, for his proper maintenance or support, then and in such case the trustees are authorized and empowered, but they shall in no event be required so to do, and as often as they shall deem necessary, pay to, use, apply or extend, for the use and benefit of the said*251 Stanley Straus, the principal of the trust estate up to and including *606 the whole thereof, as said trustees may, in their absolute discretion, deem expedient.
* * * *
The decedent died on April 11, 1943. His sister, Rose Straus, survived him and was living at the time of the hearing herein.
The Commissioner "determined that the value of the corpus of a trust created by the decedent on December 23, 1941, less the value of the life estate of the decedent's sister, Rose Straus, which preceded the right to receive the income from the property retained by the decedent, is includible in the decedent's gross estate under Section 811 (c) of the Internal Revenue Code as a transfer in contemplation of death and as a transfer under which the decedent retained for his life or for a period not ascertainable without reference to his death, or for a period which did not, in fact, end before his death, the possession or enjoyment of or the income from the property."
The transfer of property by decedent to the trust above referred to was not a transfer made in contemplation of death.
OPINION.
In his notice of deficiency respondent determined that the transfer of property by decedent to the*252 trust created by him in 1941 was "a transfer in contemplation of death." Considerable testimony was adduced at the hearing herein by petitioner to prove that respondent erred in this determination. In his brief respondent makes no contention that the transfer was made in contemplation of death, and we therefore assume his intention to concede this issue. However, lest there should be any doubt on this question, we have found, as a fact, that the transfer was not one made in contemplation of death. This finding is supported by the clear and uncontradicted testimony contained in the record.
The contention which respondent does make as set out in his brief, is that where the decedent made a transfer of property to be held in trust for the benefit of his sister during her natural life, reserving a life estate for himself after the death of the original beneficiary with a remainder over to his nieces and nephews, such a transfer was for a period not ascertainable without reference to his death, or for a period which does not, in fact, end before his death, and the value of the trust estate, less the value of the life estate of the first beneficiary, is includible in the decedent's gross*253 estate.
Respondent relies upon section 811 (c) of the Internal Revenue Code, the pertinent provisions of which are as follows:
(c) Transfers in Contemplation of, or Taking Effect at Death. -- To the extent of any interest therein * * * of which he [the decedent] has at any *607 time made a transfer, by trust or otherwise, under which he has retained for his life or for any period not ascertainable without reference to his death, or for any period which does not in fact end before his death (1) the possession or enjoyment of * * * the property * * *
A case which is squarely in point on the problem posed herein is Estate of Charles Curie, 4 T. C. 1175, in which we decided adversely to respondent's contentions.
Respondent seeks to distinguish the instant proceeding from the Curie case by pointing out the fact that at all times here pertinent Regulations 80, article 18, and Regulations 105, section 81.18, were in effect, whereas at the times pertinent in the Curie case there was in effect E. T. 5, C. B. XIII-2, p. 369, which was an administrative ruling to the contrary. 1
*254 In the instant case we have the same question which was decided in the Curie case and the same statutory provision under which it must be resolved. The only difference is that we have a change in the respondent's administrative rulings. In the Curie case we specifically approved the administrative construction of the statute contained in the respondent's first ruling, and, unmistakably, disapproved the construction contained in the respondent's later regulations. This disapproval was not limited to its retroactive application to the trust there involved, but was to the effect that it was not supported by the legislative history of the section of the statute there and here involved. See Helvering v. Reynolds Tobacco Co., 306 U.S. 110">306 U.S. 110. We reached the conclusion in the Curie case (p. 1184) that "since the reservation of the possibility of coming into a life estate does not amount to the retained estate contemplated by the statute, we are of the opinion that the petitioner should prevail." (Emphasis supplied.)
Regulations 80, article 18, and Regulations 105, section 81.18, do not represent an administrative construction of the statute*255 which has been uniform or of long standing, nor has there been a reenactment of the statute subsequent to the change in the regulations which might be construed as a legislative approval of such change. The inclusion of the statutory provision in question in the Internal Revenue Code is not to be considered as a reenactment. See Helvering v. Hallock, 309 U.S. 106">309 U.S. 106. Therefore, we consider our action correct in the Curie case in deciding upon our construction of the statute in question, without giving great weight to the later administrative construction. It is true that in that case a retroactive application of the new and changed regulations was involved, but, as we have pointed out, our decision was not based upon the retroactivity of the regulation, but upon our *608 conclusion that the regulation did not correctly construe the statute. We see no reason to reach a different conclusion in the instant case.
The only case cited and relied upon by respondent as authority for his later construction of the statute, which was not available to us at the time of our decision of the Curie case, is Goldstone v. United States, 325 U.S. 687">325 U.S. 687.*256 That case is clearly distinguishable on its facts.
On the authority of Estate of Charles Curie, supra, we decide this issue in favor of petitioner.
Decision will be entered under Rule 50.
Opper, J., dissenting: If we were to consider here whether decedent had retained an interest for a period "which does not in fact end before his death," the discussion in the committee report and in fact the fair construction of the language itself would preclude taxing the estate upon the value of the transferred property. Similarly, if we were dealing with a transfer prior to 1937, the respondent's official ruling then in effect would furnish a ground for the same result. Estate of Charles Curie, 4 T. C. 1175. It is unnecessarily harsh to impose a more stringent tax liability than respondent himself has announced, particularly where the taxpayer's position may well have been founded upon that assumed condition of the tax law. See Great Northern Ry. v. Sunburst Co., 287 U.S. 358">287 U.S. 358, 364.
But here I do not see how we can escape the necessity of taking a fresh view of the problem. This was determined to be*257 a transfer for a period "not ascertainable without reference" to decedent's death. And it was literally that. When the decedent set up the trust now in controversy, respondent's official regulations had for four years dealt with such a transfer as includible in the gross estate. Respondent's prior contrary ruling may have been a justifiable interpretation of a statute of somewhat ambiguous import. Even so, it would still be susceptible of reconsideration and reversal as to cases subsequently arising. See Helvering v. Wilshire Oil Co., 308 U.S. 90">308 U.S. 90; Helvering v. Reynolds Tobacco Co., 306 U.S. 110">306 U.S. 110. Since I regard the present administrative interpretation as comporting with the literal language of the statute and as not being in conflict with its spirit, and since the section, if not the subsection, has since then been amended without change of the portions material here, I believe the regulations to be appropriate and authoritative, and that they should be sustained.
Harlan, J., dissenting: I concur in the dissent herein for the reason that section 811 (c) clearly provides that there shall be included in *609 *258 every decedent's estate for the purpose of taxation any interest in property of whatsoever kind of which the decedent has at any time made a transfer by trust or otherwise and under which transfer he has retained an interest for his life or for any period which can not be determined without referring to the time of his death. In this case the interest retained by the decedent can not be ascertained without referring to the date of his death. If his death occurred before that of the cestui que trust, he had no interest. If his death occurred after that of the cestui que trust, he definitely reserved an interest to himself for life. Therefore it seems to me most illogical to say that the extent of the trust created by the decedent in his lifetime could be determined without reference to the time of his death.
Footnotes
1. These administrative rulings are set out and discussed fully in Estate of Charles Curie, 4 T. C. 1174, 1182-1183↩.