*4264 A transfer of stock by a decedent made less than two years before his death held, under the circumstances, not to have been made in contemplation of death.
*1212 This is a proceeding for the redetermination of a deficiency in the estate tax of the estate of David Strauss, deceased. The sole error alleged is the act of the Commissioner in including in the gross estate for estate-tax purposes 202 shares of stock of D. Strauss & Co., which were transferred by the decedent before his death.
FINDINGS OF FACT.
David Strauss, the decedent, was for many years engaged in the wool-pulling business in the City of Philadelphia, being associated with D. Strauss & Co., a corporation with offices in the Drexel Building in that city. Some time in the year 1919 the corporation ceased *1213 manufacturing, intending to discontinue its entire business. It continued to maintain its offices in the Drexel Building and to buy and sell wool and sheepskins, but all the time it was gradually disposing of materials in its warehouses, preparatory to a final liquidation*4265 and distribution among its stockholders. This distribution was begun in the year 1920.
On March 11, 1920, Strauss transferred 202 shares of stock of the corporation to the following persons: 100 shares each to Sadie S. Davis and Minnie S. Hahlo, his daughters, and 2 shares to Sydney Davis, the husband of Sadie S. Davis. At the time of the transfer the decedent was 73 years of age.
Sydney Davis had been connected with D. Strauss & Co. since 1909, and when, in 1919, the corporation discontinued its manufacturing Davis left its employ and engaged in buying and selling wool. In January, 1920, he began a new business of his own in which he invested all of his funds and which for some time was not operated at a profit, and Davis at that time was in need of funds to buy materials for use in his plant. The decedent's wife died in the year 1918, and a few months after her death the decedent came to live with his son-in-law, Sydney Davis, and the latter's wife.
Early in 1920 an older brother of the decedent had suggested that they take a trip to California in the summer of that year and the decedent agreed to do so. About the time the decedent was contemplating the California trip*4266 his other daughter, Minnie S. Hahlo, as a result of her husband's lack of success in business, had started a business of her own. This was making her very nervous and the decedent wished to have her discontinue the business.
At the time of the transfer the decedent stated that he wished his daughters to be looked after and did not want them to be struggling along while he himself had ample means, and that for this reason he was transferring the shares of stock to each of them. He also stated that there was to be a distribution of the assets of the corporation and that then his daughters would have some substantial money for their support. Two shares were given to Sydney Davis so that he could represent the decedent while the latter was away upon his California trip. In the year 1919 he had given Sydney Davis the sum of $40,000 to be used for the purchase of a factory for the new business in which Davis was engaged.
David Strauss died June 27, 1921, 15 months and 16 days after the transfer in question. The transfer of the 202 shares was an absolute gift by the decedent. The shares were worth approximately $88,000 and their value was determined by the Commissioner to be $88,072.
*4267 The decedent had always been robust, had enjoyed unusually good health, and had not been confined to his bed for a single day for years *1214 prior to his final illness. During 1919 and 1920, the family physician had seen the decedent occasionally, generally at the physician's office, but had treated him only for slight colds and for a minor stomach disorder. In February and March of 1921, the physician discovered that the decedent had a heart murmur and the usual results of what was termed a cardio-renal condition. On March 25, 1921, the decedent suffered a heart attack and subsequent to this date was confined to his home seriously ill for some time.
After his recovery from this attack the decedent returned to his office until about the 9th of June, 1921, when he again suffered a heart attack necessitating frequent visits of his physician. On the 19th of June the decedent insisted upon going to Atlantic City where he remained until his death on June 27th.
Until March, 1921, Strauss had gone to his office every day and continued to perform his usual duties in his business, which included keeping the company's books, attending to its financial matters and supervising*4268 the buying and selling. He also continued to engage in other activities. In addition to his duties with D. Strauss & Co., he was active in several charitable organizations, which occupied part of his time after office hours and on Sundays. He was president of a building association, with which he spent some time every day, and attended all its meetings and investigated all its property. These activities continued until March of 1921, and after his recovery from his first heart attack until his final illness in June of 1921.
At the time of the transfer and subsequently until stricken with his heart attack, the decedent's condition was as good as that of the average man of his years, and he was in no immediate danger of death nor was he advised by his physician that there was anything to indicate that death was near at hand. He was always quite active and not given to worry. The decedent was obliged to defer his trip to California, since his presence in Philadelphia was needed to straighten out certain difficulties in which D. Strauss & Co. had been involved due to the failure of a firm having some common business interests with the corporation.
The decedent belonged to an*4269 unusually long-lived family, his father having died at the age of 81 and his brother at the age of 84; his sister was still living at the time of the hearing and was 89 years of age. At the time of the transfer he had no reason to expect that his death would occur in the immediate future.
OPINION.
MURDOCK: Section 402 of the Revenue Act of 1918, provides -
That the value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated -
(c) *1215 To the extent of any interest therein of which the decedent has at any time made a transfer, or with respect to which he has at any time created a trust, in contemplation of or intended to take effect in possession or enjoyment at or after his death (whether such transfer or trust is made or created before or after the passage of this Act), except in case of a bona fide sale for a fair consideration in money or money's worth. 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, *4270 shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this title * * *.
The transfer in question was an absolute gift taking effect in praesenti and not intended to take effect in possession or enjoyment at or after the death of the decedent, and we are only concerned with the question as to whether it was made in contemplation of death within the meaning of the statute.
We have had occasion to discuss this provision of the Act in several cases, see ; ; and we have held that it was the intention of Congress to provide for the inclusion in the gross estate of the value of any property concerned of which the decedent made a transfer in contemplation of death within a reasonable time in the near future as distinguished from the general expectation of death entertained by everyone. This construction of the statute has been applied with uniformity, both in the State and Federal courts. *4271 ; ; ; ; ; ; ; ; ; .
The transfer was made less than two years before death and was a final disposition of a material part of the decedent's property. Therefore, the presumption arises under the statute that the transfer was made in contemplation of death and it must be taxable unless there is evidence sufficient to overcome the presumption fixed by the statute.
From the evidence in this case we are convinced that the decedent at the time he made the transfer in question had no apprehension of death within a reasonable time in the near future and that the motive for the transfer was his desire to provide an income for his daughters during his lifetime. We are of the opinion that the evidence is sufficient to overcome the presumption of the statute; that the transfer*4272 was not made in contemplation of death within the meaning of the statute, and that the respondent was in error in including the value of the stock transferred in the decedent's gross estate.
Judgment will be entered on notice of 15 days, under Rule 50.