Corliss v. Bowers

Holding

A grantor who retains the power to revoke a trust and recover the trust property at will is taxable on the trust's income, because the power to dispose of income is the equivalent of ownership.

Facts

Corliss created a trust for the benefit of his wife and children but retained the right to revoke the trust and revest the corpus in himself at any time. The trust's income was distributed to the beneficiaries. The Commissioner taxed the income to Corliss as grantor.

Reasoning

Justice Holmes wrote that taxation is not so much concerned with the refinements of title as it is with actual command over the property taxed. The retained power of revocation gave Corliss command over the trust assets and their income, making the income properly taxable to him.