United States v. Davis

157 Ct. Cl. 950, 152 Ct. Cl. 805

Opinion

On writs of certiorari (368 U.S. 813) to review the action of the United States Court of Claims in holding that no taxable gain resulted from the transfer of appreciated property by the taxpayer to his former wife pursuant to a property settlement agreement executed prior to divorce, but that the legal fees paid by taxpayer to his wife’s attorney were not deductible for tax purposes, the Supreme Court reversed in part, holding that a taxable gain did result, the fair market value of the marital rights involved being, in the opinion of the Supreme Court, ascertainable, and that the Commissioner of Internal Revenue’s assessment of a taxable gain based on the value of the stock at the date of its transfer has not been shown to be erroneous. The Supreme Court held that the fee paid the wife’s attorney was not deductible by the taxpayer and affirmed the decision of the Court of Claims to this extent. Petitions for rehearing were denied October 8, 1962.