Crummey v. Commissioner - 397 F.2d 82 (9th Cir. 1968)

Rule:

Postponed enjoyment is not equivalent to a future interest if the postponement is solely caused by the minority of the beneficiary.

Facts:

Petitioners filed gift tax returns, claiming a $3,000 per beneficiary exclusion under 26 U.S.C.S. § 2503(b) in establishing living trusts for their two children. Respondent determined that petitioners were entitled to only one exclusion for each year, believing that gifts held in trust for minors constituted future interests, which were disallowed. The tax court agreed as to the gifts in trust to minors, but determined that a gift in trust to an adult qualified as a gift of a present interest because of additional rights accorded to persons over 18. The parties appealed.

Issue:

Did a present interest given by petitioners to their minor children, qualify as an exclusion under 26 U.S.C.S. § 2503(b)?

Answer:

Yes.

Conclusion:

The court determined that petitioners were entitled to claim exclusions, as postponed enjoyment did not constitute a future interest if the postponement was solely attributable to the beneficiaries' minority.