Alfred E. Gallade - Page 19

                                       - 19 -                                         
               Petitioner directed GCI to open the Republic Bank account on           
          December 30, 1985, at which time $771,000 was deposited.8  Both             
          petitioner and Mr. Haynes of First American were signatories of             
          the Republic Bank account, and both individuals were required to            
          sign for a transaction.  Therefore, we must determine whether               
          this two-signature requirement posed a substantial limitation or            
          restriction on petitioner’s control of the funds.                           
               In Estate of Fairbanks v. Commissioner, 3 T.C. 260 (1944),             
          the decedent was entitled to receive annual delay rentals from              
          Sun Oil Co., which she specifically devised to her four children            
          and surviving husband.  Because a dispute arose between                     
          decedent’s husband and her executors, in 1940, the Sun Oil Co.              
          deposited the rentals in a joint bank account that required the             
          signatures of decedent’s husband and her executors before any               
          withdrawals could be made.  The Court held that the estate was              
          not required to recognize income in 1940, stating that “these               
          delay rentals were not paid to * * * [the] executors, but, on the           
          contrary, were paid by the Sun Oil Co. to the * * * [bank], and             
          were deposited in that bank to a new account” of which decedent’s           
          husband and her executors were joint signatories.  This Court               
          stressed that, in order for the executors to make a withdrawal,             
          they needed the signature of decedent’s husband.  The opinion               
          concluded that this was enough of a restriction on the account to           

          8 See supra note 4.                                                         

Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  Next

Last modified: May 25, 2011