92 C. Cls. We have this day decided the first question, in No. 419, Helvering v. Hutchings, (312 U. S. 219) in which we held that in the case of gifts in trust the beneficiaries are the persons to whom the gifts are made and that for purposes of computation of the tax § 504 (b) excludes the first $5,000 in value of the gift to each beneficiary from the taxable amount of the gifts made in the calendar year. For the reasons stated in our opinion in that case we hold that the first beneficiaries. of the trusts in this case are the persons to whom the gifts were made and that the taxpayer is entitled to the benefit of the $5,000 exclusion for each gift to such beneficiary if it is not of a future interest. But the Government argues here, as it did below, that the gifts to the beneficiaries of the 1932 trust are of future interests within the meaning of the statute and treasury regulations. While the eight named grandchildren are the first beneficiaries of the trust, and the persons to whom the gifts were made, none of them takes any benefit from the trust before the end of the ten-year accumulation period or until he is twenty-one, whichever last occurs, and then only if he survives that event. And the question is whether such a gift is a gift of a "future interest" within the meaning of 8504 (b). Respondent, relying on statutes and judicial decisions of Alabama, where the trust was created and is being administered, insists that the gifts to the named grandchildren are present not future interests as defined by Alabama law. He argues that as § 504 (b) does not define the "future interests" gifts of which are excluded from its bene-fits, they must be taken to be future interests as defined by the local law, and it is the local law definition of future interests which must be adopted in applying the section. But as we have often had occasion to point out, the revenue laws are to be construed in the light of their general purpose to establish a nation-wide scheme of taxation uniform in its. application. Hence their provisions are not to be taken as subject to state control or limitation unless the language or necessary implication of the section involved makes its application dependent on state law. Burnet v. Harmel, 287 Ü. S. 103, 110;Morgan v. Commissioner, 309 U. S. 78, 81. We find no such implication in the exclusion of gifts of "future interests" from the benefits given by § 504 (b). In the absence of any statutory definition of the phrase we look to the purpose of the statute to ascertain what is intended. It plainly is not concerned with the varying local definitions of property interests or with the local refinements of conveyancing, and there is no reason for supposing that the extent of the granted tax exemption was intended to be given a corresponding variation. Its purpose was rather the pro 291825-41-CC-vol. 92-42 92 C. Cls. tection of the revenue and the appropriate administration of the tax immunity provided by the statute. It is this purpose which marks the boundaries of the statutory command. The committee reports recommending the legislation declared (H. Rept. No. 708, 72d Cong., 1st Sess., p. 29; S. Rept. No. 665, 72d Cong., 1st Sess., p. 41): "The term 'future interests in property' refers to any interest or estate, whether vested or contingent, limited to commence in possession or enjoyment at a future date. The exemption being available only insofar as the donees are ascertainable, the denial of the exemption in the case of gifts of future interests is dictated by the apprehended difficulty, n many instances, of determining the number of eventual donees and the values of their respective gifts." Article XI of Treasury Regulation 79, 1933 and 1936 editions, interpreting § 504 (b), declared that "future interests" include any interest or estate "whether vested or contingent, limited to commence in use, possession or enjoyment at some future date or time." This definition stands unchanged in the regulations and while § 504 (b) was amended by § 505 of the 1938 Revenue Act so as to withdraw the benefit of the $5,000 exclusion from all gifts in trust the section as amended continues to withhold the benefit of the exclusion from all gifts of "future interests in property." We think that the regulations, so far as they are applicable to the present gifts, are within the competence of the Treasury in interpreting § 504 (b) and effect its purpose as declared by the reports of the Congressional committees, and that the gifts to the eight beneficiaries of the 1932 trust were gifts of future interests which are excluded from the benefits of that section. Here the beneficiaries had no right to the present enjoyment of the corpus or of the income, and unless they survive the ten-year period they will never receive any part of either. The "use, possession, or enjoyment" of each donee is thus postponed to the happening of a future uncertain event. The gift thus involved the difficulties of determining the "number of eventual donees and the value of their respective gifts" which it was the purpose of the statute to avoid. We have no occasion to consider the definition of future interests in other aspects than those presented by the present case. The judgment of the Court of Claims will be reversed so far only as it excluded the gifts to the 1932 trust from the computation of the tax for each of the years in question. 92 C. Cls. THE SHIP CONSTRUCTION & TRADING COMPANY, INC. [No. H-376] [91 C. Cls. 419; 312 U. S. -] Government contract; action of unauthorized individual not binding on the Government, estoppel against Government; statute of limitation. Decided April 1, 1940. Judgment for the defendant. Plaintiff's motion for new trial overruled October 7, 1940. Plaintiff's petition for writ of certiorari denied by the Supreme Court March 10, 1941. GENERAL MOTORS CORPORATION (AS TRANSFEREE IN COMPLETE LIQUIDATION OF WALTER J. BEMB, INC.) v. THE UNITED STATES UNITED MOTORS SERVICE, INCORPORATED, v. THE UNITED STATES [Nos. 43947, 43929] [Ante, p. 159; 312 U. S.-1 Capital stock tax and excess profits tax; constitutionality; declaration of value not arbitrary; authority of Congress. Decided November 12, 1940. Demurrer sustained and petition dismissed. Petition for writ of certiorari denied by the Supreme Court March 31, 1941. INDEX DIGEST ACCOUNT STATED. AGREEMENT PERFECTED. See Contracts XXXIV. AGRICULTURAL ADJUSTMENT ACT. AMBIGUITY. See Contracts XXVI, XXVII, XXVIII. See Pay And Allowances X, XI, XII. See Contracts XLI. ARMY OFFICER, PROPERTY OF. Where baggage of Army officer was lost while being transported by ATTORNEY'S FEES. See Taxes I, II, III. "BUSINESS," DEFINITION OF. See Taxes III. CARGO OWNERS. See Steamboat II. CASH BASIS. See Taxes XXVII. CHARTER HIRE. See Steamboat V. CIVILIAN EMPLOYE. See Pay And Allowances VIII. CLAIM FOR REFUND. See Taxes VII, XIV, XV, XVI, XVII, XVIII, XIX, XX. See Taxes XXI, XXII. |