U.S. Court of Appeals for the Fourth Circuit, 1974

John A. Schultz v. United States

U.S. Court of Appeals for the Fourth Circuit · Decided March 11, 1974 · Clark, Haynsworth, Craven

493 F.2d 1225; 33 A.F.T.R.2d (RIA) 1499; 1974 U.S. App. LEXIS 9744 (Federal Reporter, Second Series)

Counsel

Gilbert Hahn, Jr., Washington, D. C. (Daniel G. Grove, Mark B. Sandground and Amram, Hahn & Sandground, Washington, D. C., on brief) for appellant., Ann Belanger, Atty., Tax Div., U. S. Dept, of Justice (Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwaclcs and Jonathan S. Cohen, Attys., Tax Div., U. S. Dept, of Justice, and Brian P. Get-tings, U. S. Atty., on brief) for appellee.

Cases that cite this one

10 later published cases cite this decision. The 9 that cite it most often are listed here.

Griffin v. United States (District Court, W.D. Texas 1998)
Larry L. Sather v. CIR (8th Cir. 2001)
Ina F. Knight v. Commissioner (United States Tax Court 2000)
Charles T. McCord, Jr. and Mary S. McCord, Donors v. Commissioner (United States Tax Court 2003)
Estate of Schuler v. Commissioner (United States Tax Court 2000)
Sather v. Commissioner (United States Tax Court 1999)
Baine P. and Mildred C. Kerr v. Commissioner (United States Tax Court 1999)
Kornfeld v. Commissioner (10th Cir. 1998)
Mary Ann Heyen, of the Estate of Jennie Owen, Deceased v. United States (10th Cir. 1991)

This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.

Opinion

PER CURIAM:

On February 17, 1965, the taxpayer gave forty-four shares of Jersey Shore Steel Company, a closely held corporation, to each of his three children, and to each of the three children of his brother, Charles. On the same day, Charles gave the same number of shares to each of his children and to each child of the taxpayer. Similar reciprocal transactions were effected on February 4, 1966, and February 14, 1967.

The taxpayer claimed an annual $3,000 exclusion with respect to each year for each of the nephews and nieces. This claim was disallowed upon the basis that the primary purpose of the reciprocal transactions was for each brother to effect enlarged gifts to his own children.

Relying on United States v. Estate of Grace, 395 U.S. 316, 89 S.Ct. 1730, 23 L.Ed.2d 332 (1969), the district court *1226 held that “actual intent” was “immaterial” and that the only issue was the “nature and operative effect of the transfers themselves.” Thereupon, he directed a verdict for the government.

We need not reach the issue of whether this rule of Grace applies with equal force in the area of indirect gifts, for we hold that, on the facts of this case, a reasonable jury could have concluded only that the taxpayer intended to benefit his children, rather than those of his brother, by the gifts in question.

Affirmed.

Case-law data current through December 31, 2025. Source: CourtListener bulk data.