The opinion
Smith,
dissenting: I perceive no valid distinction between this case and that of Irwin v. Gavit, 268 U. S. 161 . That case arose under the Revenue Act of 1913, which imposed an income tax upon income “ arising or accruing from all sources ” and included “ the income, from but not the value of property acquired by gift, bequest, devise or descent.” During the years 1913, 1914, and 1915 Gavit received the income from a certain fund as a bequest. The court held that it was liable to income tax and said:
But we think that the provision of the act that exempts bequests assumes the gift of a corpus and contrasts it with the income arising from it, but was not intended to exempt income properly so called simply because of the severance between it and the principal fund * * * The money was income in the hands of the trustees and we know of nothing in the law that prevented its being paid and received as income by the donee.” (Italics ours.)
If the gift of a corpus is the “ bequest ” that is not liable to income tax then the petitioners in the case at bar did not receive a bequest. They simply received an annuity which, during the taxable year, was paid from the income of the estate. Clearly, under section 219(d) of the Revenue Act of 1921, the fiduciary making the estate income-tax return ivas entitled to deduct from gross income the amount of the annuity paid to each of the petitioners during the taxable year. Under the decision of the Board neither thé fiduciary nor the beneficiary can be held liable to income tax in respect of the income received.
Furthermore, under the decision of the court in Irwin v. Gavit, supra, the petitioners in the case at bar had an interest in the estate of the decedent and the income from that interest is liable to income tax the same as the income which Gavit received in the above cited case.