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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
9(...continued)
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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