Oechler v. Graves

267 A.D. 632, 48 N.Y.S.2d 358, 1944 N.Y. App. Div. LEXIS 4791

Opinions

Memorandum: by the Court.

Petitioner is the beneficiary

of a trust created by her husband’s will by the terms of which the residue of the net income is payable to her “ in weekly installments for and during her natural life ”. Among the assets of the estate were certain mortgages which it was necessary to foreclose or to take deeds in lieu of foreclosure. As a result these properties were operated at a loss during the tax years in question. The question here is whether such losses may he deducted by petitioner from her taxable distributive share or whether they should be made up out of the corpus of the estate. The Tax Commission held that the distributive share of petitioner subject to tax under section 365 of the Tax Law is the amount which she was entitled to receive out of the income from the trust and that the losses sustained in the operation of .the properties must be paid by the trustees from the principal of the trust and not from the income.

Determination of the State Tax Commission in all respects confirmed, without costs.