TAXATION-FEDERAL ESTATE TAX-JOINT TENANCY-RETROACTIVITY

The recent decision by the Supreme Court in United States v. Jacobs deals with the troublesome issue of retroactivity under the federal estate tax law. The decedent whose estate was involved in this case had paid the entire consideration for certain real estate which was conveyed to himself and his wife as joint tenants. This transaction took place in 1909. The decedent died in 1924, shortly after the effective date of the Revenue Act of that year.

The Commissioner of Internal Revenue included the entire value of the real estate in the decedent's gross estate. The executors paid the tax under protest and sued to recover. The district court held that only half the value of the real estate could be included in the gross estate. The circuit court of appeals affirmed.

On certiorari to the Supreme Court, it was held, with three justices dissenting, that the judgments below should be reversed; that the tax should be measured by the entire value of the real estate, and that so applied it was not invalid under the due process clause on the ground that it was retroactive.