HELVERING V. HORST
311 U.S. 112 (1940)
NATURE OF THE CASE: This was a dispute over the tax status of a gift.
FACTS: In 1934 and 1935, D, the owner of negotiable bonds, detached them from the
negotiable coupons and delivered them to his son shortly before the due date. D claimed that
the delivery was a gift. The son then collected the coupons at maturity. Under section 22
the IRS ruled that the interest payments were taxable in the years when paid. The Circuit
Court of Appeals reversed the order of the Board of Tax Appeals sustaining the tax. The
appeals court determined that as the consideration for the coupons had passed to the
obligor, the donor had, by the gift parted with all control over them and their payment and
for that reason this case was distinguishable from Lucas v. Earl and Burnet wherein the
assignment of compensation for services had preceded the rendition of the services and where
the income was held taxable to the donor. The Supreme Court granted certiorari.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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