Eldon R. Kenseth and Susan M. Kenseth - Page 35

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         the taxpayer therein was not taxable on the prize that his                     
         daughter received as a result of the taxpayer’s successful entry               
         in a contest.  Under the rules of the contest, only persons under              
         the age of 17 years and 1 month were eligible to receive prizes.               
         See id. at 1004.  Any contestant over that age was required to                 
         designate a person below that age as the recipient of the prize.               
         See id. at 1004.  The taxpayer designated his daughter as                      
         recipient.  See id. at 1005.  The taxpayer did not play any part               
         in creating this restrictive rule.  Although the contest was                   
         described as a “Youth Scholarship Contest”, the contest rules did              
         not limit the daughter in her use of the prize, a fully paid-up                
         annuity policy.  See id. at 1005.  The prize was worth $1,287.12;              
         respondent included this amount in the taxpayer’s income and                   
         determined a deficiency of $283.16.  See id. at 1004, 1005.  We                
         summarized our conclusion as follows, id. at 1009:                             
                    Granted that an individual cannot escape taxation                   
              on income to which he is entitled by “turning his back”                   
              upon that income, the fact remains that he must have                      
              received the income or had a right to do so before he                     
              is taxable thereon.  As noted by the court in United                      
              States v. Pierce, 137 F.2d 428, 431 (C.A. 8, 1943):                       
                    The sum of the holdings of all cases is that                        
                    for purposes of taxation income is                                  

               either in the ruling in question or in the case before                   
               us.  The taxpayer there, as here, acquired nothing                       
               himself; he received nothing nor did he have a right to                  
               receive anything.                                                        
               4   Cf. Cold Metal Process Co. v. Commissioner, 247                      
               F.2d 864, 872 (C.A. 6, 1957).                                            

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