Salvatore V. Commissioner
''Salvatore v. Commissioner'' is an opinion from the United States Tax Court that holds that a taxpayer cannot avoid paying taxes on the sale of property by first conveying that property to someone else. This opinion was later affirmed by the United States Court of Appeals for the Second Circuit. This case outlines some limitations on the "fruit-and-tree" metaphor established in ''Lucas v. Earl'', 281 U.S. 111 (1930) and further developed in ''Helvering v. Horst'', 311 U.S. 112 (1940). Decided in 1970, the case arose when a taxpayer tried to avoid paying Capital gains tax in the United States, capital gains tax from sale of property by giving a share in that property to her children. She then paid a gift tax, which is significantly less than the tax on the gain would have been if she had not given a share to her children. Background Prior to his death on October 7, 1948, Susie Salvatore's husband owned and operated a gas station in Greenwich, Connecticut. Upon his death, his e ...
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United States Tax Court
The United States Tax Court (in case citations, T.C.) is a Federal judiciary of the United States, federal trial court court of record, of record established by US Congress, Congress under Article One of the United States Constitution, Article I of the Constitution of the United States, U.S. Constitution, section 8 of which provides (in part) that the Congress has the power to "constitute Tribunals inferior to the supreme Court". The Tax Court specializes in adjudicating disputes over federal income tax, generally prior to the time at which formal tax assessments are made by the Internal Revenue Service. Though taxpayers may choose to litigation, litigate tax matters in a variety of legal settings, outside of Bankruptcy in the United States, bankruptcy, the Tax Court is the only forum in which taxpayers may do so without having first paid the disputed tax in full. Parties who contest the imposition of a tax may also bring an action in any United States District Court, or in the ...
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