## Facts

- Maria Coxe Skinner created an inter vivos trust providing that trustees could, in their absolute discretion, distribute income and principal for her support and maintenance.
- During Skinner’s life, she received trust income and the trust was available to meet her support needs.
- On her gift-tax return, Skinner treated the transfer as incomplete as to the value of a retained life interest; the government rejected that position and treated the transfer as a completed gift of the corpus.
- After Skinner’s death, the Commissioner determined the trust corpus was includable in her gross estate under § 811 of the Internal Revenue Code of 1939 (predecessor to I.R.C. § 2036).
- The estate paid the assessed deficiency, sought a refund administratively, was denied, and brought a refund suit.
- The district court upheld inclusion of the trust corpus; the estate appealed.

## Issues

1. Whether a trust permitting discretionary distributions for the settlor’s support and maintenance constitutes a retained “possession or enjoyment” (or right to income) causing estate inclusion under § 811 of the 1939 Code (now § 2036).
2. Whether the government’s earlier gift-tax position (treating the transfer as a completed gift due to lack of an enforceable life estate) barred it from asserting estate-tax inclusion of the trust corpus at death.

## Decision

- The Second Circuit affirmed the judgment for the United States.
- The court held the trust corpus was includable in Skinner’s gross estate under § 811 because the arrangement effectively allowed lifetime enjoyment for her support and maintenance.
- The court rejected the estate’s contention that the government’s prior gift-tax treatment precluded estate inclusion.

## Legal Principles

- Property transferred during life is includable in the gross estate under § 811/§ 2036 when the transfer is one under which the decedent retained, for life, possession or enjoyment of the property or the right to income from it.
- A support-and-maintenance standard, even coupled with trustees’ stated “absolute discretion,” can amount in substance to retained lifetime enjoyment sufficient for § 2036 inclusion.
- Gift-tax characterization and valuation concepts do not control the separate statutory inquiry for estate-tax inclusion under § 2036.
- The government is not generally barred from taking different positions in distinct tax contexts when each position rests on the applicable statutory test.

## Conclusion

The court sustained inclusion of the trust corpus in the decedent’s gross estate because the trust’s discretionary support-and-maintenance structure left the property available for her lifetime benefit, and the government’s earlier gift-tax stance did not prevent application of the estate-tax inclusion statute.


Estate of Skinner v. United States, 316 F.2d 517 (2d Cir. 1963)