Commissioner v. Duberstein
| Commissioner v. Duberstein | |
|---|---|
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| Argued March 23, 1960 Decided June 13, 1960 |
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| Full case name | Commissioner of Internal Revenue v. Duberstein, et ux. |
| Citations | 363 U.S. 278 (more) |
| Holding | |
| The court upheld the Tax court's ruling with regards to Duberstein but split as to Stanton. | |
| Court membership | |
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| Case opinions | |
| Majority | Brennan |
| Concur/dissent | Frankfurter, joined by Harlan |
| Concur/dissent | Black |
| Dissent | Douglas |
Commissioner v. Duberstein, 363 U.S. 278 (1960), was a United States Supreme Court case from 1960 dealing with the exclusion of "the value of property acquired by gift" from the gross income of an income taxpayer.
It is notable (and thus appears frequently in law school casebooks) for the following holdings:
The Court was presented with two sets of facts.
Berman was president of Mohawk Metal Corporation. Duberstein was president of the Duberstein Iron & Metal Company. They would often talk on the phone and give each other names of potential customers. After receiving some particularly helpful information, Berman decided to give Duberstein a gift of a Cadillac. Although Duberstein said he did not need the car as he already had a Cadillac and an Oldsmobile, he eventually accepted it. Mohawk Metal Corporation later deducted the value of the car as a business expense, but Duberstein did not include the value of the Cadillac in his gross income when he filed his tax return, deeming it a gift. The Commissioner asserted a deficiency for the car’s value against Duberstein. The Tax court affirmed.
Stanton worked for the Trinity Church in New York City as the comptroller of the Church corporation and president of the corporation. He resigned from both positions to go into business for himself. As a "gratuity" the corporation's directors awarded Stanton $20,000 in appreciation of the services rendered. While some directors testified that Stanton had been well liked by all in the Vestry and the $20,000 was a gift to show that good will, there was also some evidence given that Stanton was being forced to resign. The trial judge made a simple finding that the payments were a "gift".
Was the car that Duberstein received a gift for taxation purposes?
Was the money that Stanton received a gift for taxation purposes?
Justice William J. Brennan, Jr., for the majority, upheld the Tax court's ruling with regard to Duberstein: Duberstein's car was not a gift, because the motives were certainly not "disinterested" -- it was given to compensate for past customer references or to encourage future references. Duberstein at 291-92.
The court split as to Stanton. A plurality remanded Stanton's situation back to the trial court, to determine whether the Vestry intended to give the money as a gift or as compensation. Id. at 292.
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