*1741 Where decedent purchased certain property and caused the title to be transferred directly to his wife as a gift, and this property was subsequently transferred by the wife, through a third person, to decedent and his wife as tenants by the entirety, such property does not fall within the exception contained in section 302(e) of the Revenue Act of 1924 and should be included in the gross taxable estate of decedent.
*1266 This proceeding was brought for the redetermination of a deficiency in estate tax under the provisions of the Revenue Act of 1924 in the sum of $18,508.58.
The issues are:
(1) Whether or not the value, or any part thereof, of 10 certain parcels of real estate owned by the decedent and his wife as tenants *1267 by the entirety should be included in the gross estate for the purposes of taxation.
(2) Whether or not the gross estate of decedent should be increased, as set forth in the amended answer of the respondent, by the amount of the value of an additional one-half interest in certain parcels of real estate, designated*1742 hereinafter in the findings of fact as items one to four, inclusive, thus creating a further deficiency in estate tax.
The petitioner's original allegations of error related to 12 parcels of real estate owned by the decedent and his wife as tenants by the entirety, but the allegations of error with respect to two of these parcels have been abandoned by the petitioner.
The parties hereto entered into a written stipulation as to the facts. From the stipulation and the pleadings we find the facts as follows.
FINDINGS OF FACT.
The decedent, Frederick C. Bowditch, died a resident of Brookline, Mass., on October 7, 1925, leaving a last will and testament. At the date of his death he was married. The last will and testament was duly admitted to probate on November 11, 1925, by the Probate Court for the County of Norfolk, Commonwealth of Massachusetts, and the petitioner, Elizabeth F. Bowditch, widow of the decedent, was appointed executrix, duly qualified and is still acting as such executrix. The executrix duly and timely filed her return for the Federal estate tax on Form 706. In her return the petitioner, under Schedule D 1 - "Jointly Owned Property," listed and described*1743 12 parcels of real estate therein described as items 1 to 12, inclusive. At the date of the decedent's death these 12 parcels of land were owned by the decedent and his wife as tenants by the entirety. In the estate-tax return these 12 parcels of real estate were stated to be listed under protest and the values thereof were not carried into the total of the gross estate as returned by the petitioner.
The 10 parcels of land in question in this proceeding were listed as items 1 to 10, inclusive, and the respective dates on which they were conveyed to the decedent and his wife as tenants by the entirety are as follows:
| Item | Date of creation of estate by the entirety |
| 1 | (2 deeds) 1904 and 1907 |
| 2 | Sept. 22, 1921 |
| 3 | Sept. 22, 1921 |
| 4 | Sept. 22, 1921 |
| 5 | Apr. 6, 1905 |
| 6 | Mar. 24, 1914 |
| 7 | June 6, 1921 |
| 8 | Nov. 1, 1921 |
| 9 | Apr. 30, 1921 |
| 10 | Nov. 6, 1922 |
*1268 The four parcels of land designated as items 1 to 4, inclusive, were originally purchased with money furnished by the decedent, but said parcels were conveyed directly to Elizabeth F. Bowditch, his wife, and she remained the owner of record until these parcels were conveyed, through a third person, to*1744 herself and the decedent as tenants by the entirety.
The six parcels of land designated as items 5 to 10, inclusive, originally belonged to the decedent and were purchased with his money. The title to these six parcels of land stood of record either in decedent's name or in the names of other persons for convenience until the respective parcels were conveyed through a third person to the decedent and his wife as tenants by the entirety.
One-half of the net values of the items of real estate designated as items 1 to 4, inclusive, were as follows at the date of decedent's death:
| Item 1 | $7,365.00 |
| Item 2 | 19,500.08 |
| Item 3 | 9,322.02 |
| Item 4 | 87,056.13 |
The values of the items designated as items 5 to 10, inclusive, were, at the date of decedent's death, as follows:
| Item 5 | $20,257.28 |
| Item 6 | 17,072.90 |
| Item 7 | 71,026.85 |
| Item 8 | 63,542.07 |
| Item 9 | 178,849.35 |
| Item 10 | 292.32 |
The values of the real estate as stated above represent net values after taking into consideration outstanding mortgages, accrued interest, taxes, insurance and rents. The decedent's gross estate, exclusive of the value of the parcels of land held by him and his wife as*1745 tenants by the entirety, was $76,271.02. The net estate subject to tax shown by the return was $15,707.81, on which the petitioner computed a total tax of $157.08, and, after deducting therefrom a credit for state inheritance tax, paid the net sum of $117.81.
The respondent added to the gross estate the values of items 5 to 10, inclusive, in the amounts hereinbefore stated and the values of decedent's undivided one-half interest in items 1 to 4, inclusive, in the amounts hereinbefore stated. The inclusion of these values, together with the value of the other two parcels hereinbefore referred to, in the gross estate created the deficiency in tax in question.
In his amended answer to the petition the respondent averred that in determining the deficiency there should be included in the gross estate the additional undivided one-half interest in items 1 to 4.
*1269 OPINION.
VAN FOSSAN: The first issue arises from the petitioner's contentions to the effect that the respondent was in error in including in the gross estate for the purposes of the estate tax any of the parcels of realty with respect to which the tenancies by the entirety were created prior to the effective*1746 date of the Revenue Act of 1924. Relative to this issue the petitioner contends that if the Revenue Act of 1924 is to be construed as requiring such inclusion in that respect the act is unconstitutional.
We have considered the questions involved in the first issue in several proceedings and on the authority of our decisions in those proceedings we must hold adversely to the petitioner. ; ; ; .
The second issue is whether or not the total value, or any part of the value, of the parcels of real estate designated in the findings of fact as items 1 to 4, inclusive, should be included in the gross estate.
The facts disclose that the purchase price of these parcels of realty was furnished by the decedent but that they were conveyed originally to his wife and stood of record in her name until conveyed, through a third person, to the decedent and his wife as tenants by the entirety. The facts also show that these tenancies by the entirety*1747 were created prior to the enactment of the applicable statute. Only the value of an undivided one-half interest in items 1 to 4, inclusive, was included by the respondent in the amount of the gross estate. By his amended answer, however, the respondent avers that in determining the deficiency the value of the whole of the parcels should be included in the gross estate.
Section 302(e) of the Revenue Act of 1924, which is applicable to the question involved in the second issue, provides in part as follows:
To the extent of the interest therein held as joint tenants by the decedent and any other person, or as tenants by the entirety by the decedent and spouse, or deposited, with any person carrying on the banking business, in their joint names and payable to either or the survivor, except such part thereof as may be shown to have originally belonged to such other person and never to have been received or acquired by the latter from the decedent for less than a fair consideration in money or money's worth: Provided, That where such property or any part thereof, or part of the consideration with which such property *1270 was acquired, is shown to have been at any time*1748 acquired by such other person from the decedent for less than a fair consideration in money or money's worth, there shall be excepted only such part of the value of such property as is proportionate to the consideration furnished by such other person. * * *
Section 302(h) is as follows:
(h) Subdivisions (b), (c), (d), (e), (f), and (g) of this section shall apply to the transfers, trusts, estates, interests, rights, powers, and relinquishment of powers, as severally enumerated and described therein, whether made, created, arising, existing, exercised, or relinquished before of after the enactment of this Act.
The petitioner contends with reference to the second issue that, in so far as the provisions of the Act of 1924 undertake to determine who contributed the property to the tenancy by the entirety, they must be construed in such a way as to recognize the validity of gifts made by a husband to his wife in good faith without intent to evade taxation prior to the enactment of the act under which the estate is taxable; and that with respect to such gifts the act is not to be construed in such a manner as to operate retroactively.
*1749 Citing , the petitioner urges that a taxing act must not be given retroactive effect unless the intent to provide for retroactive application is expressed in "clear, strong and imperative" terms. In our opinion the intent that the provisions of section 302(e) should be applied retroactively clearly appears from the provisions of section 302(h) hereinbefore quoted.
The petitioner further urges that the decedent's wife did not receive or acquire the four parcels of realty designated as items 1 to 4, inclusive, from her husband, because the latter never actually owned them. It appears, however, that the decedent furnished the consideration for which such parcels were conveyed to his wife before she conveyed them, through a third person, to herself and her husband as tenants by the entirety. As a matter of fact, the petitioner's argument is largely based on the statement that the parcels or real estate in question were originally a gift from the decedent to his wife. She, therefore, received or acquired the realty now in question from the decedent for "less than a fair consideration in money or money's worth." And in our opinion section*1750 302(e) intends that, irrespective of the date of the creation of the tenancy by the entirety, all property held as tenants by the entirety by a decedent and spouse at the date of death should be included in the decedent's gross estate for purposes of taxation, excepting from this inclusion only such property as originally belonged to the surviving spouse and was not acquired by the surviving spouse from the decedent for less than a fair consideration in money or money's worth. Therefore, irrespective of the date of the creation of the *1271 tenancy by the entirety, a gift of land made by a decedent to his wife which was afterwards conveyed to the husband and his wife as tenants by the entirety would not come within the exception contained in section 302(e). This is the clear purport of the words "never to have been received or acquired * * * for less than a fair consideration in money or money's worth." In the , the basic facts were essentially similar to the facts involved in the second issue of this proceeding. In that case the decedent had furnished the purchase price for a parcel of realty, described as lot 160*1751 of Holden and Murray subdivision, which was conveyed directly to his wife in the year 1917 as a gift from him. The decedent, Kelley, never had title to this parcel of realty. Subsequently this parcel was sold and, as part payment, the buyer caused to be conveyed to Kelley and his wife as tenants by the entirety the buyer's equity in a certain other parcel of land, described briefly in the Kelley proceeding as lot No. 1033, which was being purchased by him on installments. The property so conveyed as part payment for lot No. 160 was owned by decedent and wife as tenants by the entirety at the date of his death. It was claimed that the decedent's wife furnished the consideration for the conveyance of the tenancy by the entirety. Section 302(e) of the Revenue Act of 1924 was applicable to the Kelley case. We held in that proceeding that although lot No. 160 of Holden and Murray subdivision was owned by the decedent's wife in her own right, it was nevertheless a gift from her husband, the purchase price of which he had furnished and that, therefore, the consideration paid for lot No. 1033 was received or acquired by the surviving spouse from the decedent for less than a fair*1752 consideration in money or money's worth.
We are of the opinion that there is no fundamental distinction between the applicable principles relating to the second issue in this proceeding and those in the Kelley case respecting lot No. 160 referred to above. In both proceedings the basic question involved is the same.
It follows from the foregoing that the value of the four parcels of land in question in the second issue herein should be included in the gross estate of the decedent for the purposes of taxation. Since the respondent, in determining the deficiencies in question in this proceeding, included in the gross estate only an undivided one-half interest in such four parcels of realty, the amount of the gross estate should be increased by the amount of the value of the additional undivided one-half interest. Such addition will increase the deficiency in tax.
*1272 In accordance with the stipulation of facts the deficiency determined will be subject to a proper deduction therefrom of any sum or sums paid by the petitioner on account of state inheritance taxes.
Decision will be entered under Rule 50.