The respondent, in determining the deficiency herein involved, asserted a gift tax for 1924 in the amount of $7,969.07, holding that the property had a value in excess of that returned by the petitioner on her return. Against this, he applied the $2,775 paid by petitioner, leaving $5,194.07, the amount of the deficiency herein.

The petitioner contends that the gift was not made until 1925, and was, therefore, not taxable until that year.

Section 319 of the Revenue Act of 1924 provides:

For the calendar year 1924 and each calendar year thereafter, a tax equal to the sum of the following is hereby imposed upon the transfer by a resident by gift during such calendar year of any property wherever situated, whether made directly or indirectly, and upon the transfer by a nonresident by gift during such calendar year of any property situated within the United States, whether made directly or indirectly:

We must, therefore, determine when the transfer of this stock took place. The law as to gifts is well settled, that in order to be an effective gift there must be three factors present: (1) An intention. to give; (2) a transfer of title or delivery; and (3) an acceptance by the donee. Estate of David R. Daly, 3 B. T. A. 1042, and Allen-West Commission Co. v. Grumbles, 129 Fed. 287. The latter case involved a gift of stock, the court holding that, when a husband, owner of 110 shares of stock in a corporation, delivered a written assignment of his interest in the corporation's business to his wife, but retained the certificate of stock, voted it and received dividends thereon, there was not a valid, completed gift of stock to his wife.

In some cases it has been held that delivery of a deed of transfer is sufficient to effect transfer of the title, although the certificates themselves are not transferred. See Grymes v. Hone, 49 N. Y. 17; DeCaumont v. Bogert, 36 Hun. (N. Y.) 382; and In re Valentine's Estate, 204 N. Y. S. 284.

It will thus be seen that whereas some cases hold that delivery of a deed is sufficient to transfer title to stock, and some that delivery of the certificates themselves is essential, they all agree that there must be an intent on the part of the donor to pass title. Where the donor retains the power to control the property which is the subject matter of the gift, the gift is not completed until she has put it out of her power to exercise such control. In the instant case we are of the opinion that the donor did not intend to transfer title to the certificates until 1925. The deed of trust was signed by her, but it was retained in her possession and control, as was the certificate, and was not delivered to or accepted by the trustee until 1925. The notary public who attested the signature of Frew, the trust officer of the bank, unequivocally testified that Frew signed it in his pres

ence on January 2, 1925. The acts of the petitioner and the correspondence above set forth between her husband and the trust officer of the bank clearly show that the parties did not intend the gift to take place until 1925, and, there being no delivery either of the deed of trust or of the certificates themselves until that year, the transfer did not take effect until 1925. It follows, therefore, that the respondent erred in asserting a gift tax for 1924 upon such transfer.

The respondent did not file a brief, but, in view of objections raised by his counsel at the hearing with regard to the admission of certain testimony offered by deposition, we might state that we do not consider as of much weight the statements in the return filed by the petitioner to the effect that the gift was made in 1924. The return was not made until March, 1926, the receipt issued by the collector showing payment of the tax for 1925. The evidence clearly established that the date of March, 1925, appearing on the protest, was a typographical error and that it was not executed until March, 1926. The question of estoppel was not raised by the pleadings. Moreover, the question as to when the gift took place is one of law and not one of fact, and we are not bound by a statement of one of the parties that as a fact it took place at a certain time.

Judgment of no deficiency will be entered.

KIZZIE GORDON, PETITIONER, ET AL.,1 v. COMMISSIONER OF INTERNAL. REVENUE, RESPONDENT.

Docket Nos. 22332-22338, 22340, 22341, 22640, 24882.
Promulgated December 20, 1932.

1. Section 280 of the Revenue Act of 1926 is not unconstitutional, following Henry Cappellini, 14 B. T. A. 1269, and Phillips v. Commissioner, 283 U. S. 589.

2. Evidence held insufficient to disturb respondent's determination of the net income of the taxpayer corporation for the years 1918 and 1919.

3. Where assessments were made prior to the passage of the 1924 Act and the applicable period of limitation had expired prior to the mailing of the deficiency notice, held, such period is not extended by section 280 of the 1926 Act and therefore petitioners are not liable as transferees for any part of the deficiency asserted against taxpayer corporation, or for any part of the unpaid portion of the original 1919 assessment.

4. Certain stock was transferred to Hettman by Kibele merely for the purpose of having Hettman represent Kibele at stock

1 Proceedings of the following petitioners are consolidated here with: Max L. Gordon; Andy Martins; Ivor B. Bell; George W. Ley; Mary C. Ley; Albert O. Pegg; Kathleen M. Turner; Walter E. Hettman; Joseph Costello; and C. B. Kibele.

holders' and directors' meetings. Upon liquidation of the corpora-
tion Hettman received and immediately paid over to Kibele his pro
rata share of corporate assets. Held, that Hettman was not a
transferee within the meaning of section 280, and that the lia-
bility of Kibele is increased by the amount of assets received by
Hettman in his behalf.

George H. Koster, Esq., and L. A. Luce, Esq., for the petitioners. J. E. Mather, Esq., and J. G. Gibbs, Esq., for the respondent.

These proceedings are for the redetermination of alleged liabilities asserted against the petitioners as transferees of the assets of the National Engineering Corporation under the provisions of section 280 of the Revenue Act of 1926. For the taxable years 1918 and 1919 the respondent determined deficiencies against the corporation of $5,631.69 and $5,785.46, respectively, and he asserts that there is an unpaid balance due on the original 1919 income and profits tax assessment of $3,073.89.

Except as pointed out later, the petitioners each allege error on the part of the respondent in the following particulars:

(a) The Commissioner has assumed that petitioners are liable under the provisions of Section 280 of the Revenue Act of 1926, for a tax in the amount above stated, as a transferee of the assets of the National Engineering Corporation, a dissolved corporation formerly with principal place of business at Wilmington, California, whereas the petitioner is not liable under said section of the law for the reason that:

(1) It is alleged that Section 280 of the Act referred to, insofar as it imposes a tax on the former stockholders of a corporation, is unconstitutional in that the liability of the several stockholders is not definitely set forth, and, furthermore, it purports to create a stockholders' liability other than that provided by the state law which should govern inasmuch as,

(2) A corporation is a creature of the state statutes and the liability of a stockholder thereof is limited by the statutes as enacted by the several states. (3) The National Engineering Corporation was incorporated under the laws of the State of California and under the laws of said state fixing the liability of stockholders of a corporation, this petitioner's liability as a stockholder for the debts of the National Engineering Corporation has long since expired.

(4) As to the taxable period 1918, it is alleged that the National Engineering Corporation filed an income tax return for said year prior to June 2, 1919, and the statutory period within which collection of any tax claimed due for that year could be made, by suit or otherwise, expired prior to June 2, 1924. By reason of this fact, the Government was without authority to bring any action against the stockholders for the collection of said tax prior to February 26, 1926, on which date the provisions of Section 280 of the Revenue Act of 1926 became effective; and insofar as Section 280 referred to tends to revive a statute of limitation which had expired prior to the enactment of said section it should be regarded as of no force and effect.

(b) If it should be held that the Commissioner did not err with respect to the points set out in the preceding paragraphs, then it is alleged that he erred in determining the net income and tax liability of the National Engineering Corporation for the taxable periods 1918 and 1919, in that

(1) He understated the net income for 1918 and overstated the net income for 1919 in the amount of $3,639.04 by reason of the fact that he did not properly allocate overhead expenses reimbursed by the Government to the two taxable years, and

(2) In determining the net income for the calendar year 1919, the same was overstated to the extent of $13,861.45, by reason of the fact that the profit on the sale of certain capital assets was overstated by said amount.

(3) In determining the invested capital of the corporation for both the years 1918 and 1919, the same was understated to the extent of $13,861.45, by reason of not including therein a paid-in surplus created at the time of the incorporation of the company on account of leasehold value acquired by the corporation in excess of the value at which same was set up on the books of the corporation. The above allegations of error appear in each of the petitions except that of Joseph Costello, Docket No. 22640, wherein the petitioner has set out the same errors, but has worded his allegations differently.

In his amended answers filed in each of the above proceedings, respondent alleged certain facts purporting to establish that the individual petitioners are transferees of the National Engineering Corporation and that the proceeds received by each exceeded in value the amount of taxes and interest claimed from each of them in these proceedings.

Thereafter, the petitioners amended their petitions in each of the proceedings, except Walter E. Hettman, alleging in addition to the foregoing errors, that the respondent erred:

in proposing to assess against these petitioners as transferees of the National Engineering Corporation, the amount of the tax originally assessed against the National Engineering Corporation on its 1919 return, but which remains outstanding and unpaid in the sum of $3,073.89, in that not only was the collection of such tax against the said corporation barred by the Statute of Limitations prior to the institution of these proceedings, but also said corporation's liability for the payment of such unpaid tax was extinguished by operation of Section 1106 of the Revenue Act of 1926, and, since there is no liability of the transferor corporation for such tax, these petitioners as transferees of said corporation cannot be held liable for a debt which has been extinguished.

The above entitled proceedings were consolidated for hearing and opinion.

FINDINGS OF FACT.

The parties filed the following stipuation, which we find as facts with respect to the issues presented:

It is hereby stipulated and agreed by and between the parties hereto, through their respective counsel, that the stipulation formerly entered into with respect to the petitioners; Mrs. Kizzie Gordon, Max L. Gordon, Andy Martins, Ivor B. Bell, George W. Ley, Mrs. Mary C. Ley, Albert O. Pegg, Kathleen M. Turner, Joseph Costello and O. B. Kibele; Dockets Nos. 22332, 22333, 22334, 22335, 22336, 22337, 22338, 22340, 22640 and 24882, respectively, may be amended and is

hereby amended to include the petitioner Walter E. Hettman, Docket No. 22341; and that all of said appeals may be consolidated for the purpose of this stipulation and for the purpose of the issuance by the Board of an order of redetermination of deficiency in accordance with the following agreement:

It is further stipulated and agreed that the stipulation hereinbefore entered into is amended to read as follows:

It is stipulated and agreed by and between the parties hereto, through their respective counsel, that the petitioners herein, with the exception of Walter E. Hettman, Docket No. 22341, are liable in these proceedings as transferees of the National Engineering Corporation, a dissolved corporation, within the meaning of Section 280 of the Revenue Act of 1926, and that, with the exception of the petitioners Walter E. Hettman, and O. B. Kibele, they received property in the liquidation of the corporation in the amounts shown in the exhibit hereto attached and marked "Amended Exhibit A" and hereby made a part hereof, and that, with the exception of said petitioners Walter E. Hettman and O. B. Kibele, they were owners and holders of the capital stock of said corporation at the time of dissolution in the amount of shares set opposite their names as appearing on said "Amended Exhibit A" hereto attached.

The facts with respect to the stock ownership in the National Engineering Corporation of Walter E. Hettman and O. B. Kibele are hereinafter set forth. There are also hereinafter set forth the facts in respect to the amount of property received in the liquidation of said corporation by said Walter E. Hettman and O. B. Kibele.

It is further stipulated that said National Engineering Corporation duly filed its 1918 income, excess profits and war profits tax return on June 16, 1919 and that the deficiency in tax for the year 1918 as shown in the 60-day letters addressed to the petitioners herein, in the amount of $5,631.69 was assessed against said National Engineering Corporation on February 25, 1924, and that said deficiency has not been paid nor has there been instituted any suit or proceeding other than this appeal for the collection of said tax.

It is further stipulated that the said National Engineering Corporation duly filed its income and profits tax return for the year 1919 on May 15, 1920; that on May 27, 1920 there was duly assessed against said corporation the original tax based upon said return in the sum of $7,885.00 for the year 1919. Of said original tax of $7,885.00, but $4,811.11 was paid, the balance of $3,073.89 still remaining unpaid as indicated in the 60-day deficiency letter to the petitioners herein; that no suit or proceeding has been instituted for the collection of said balance of $3,073.89 of the original tax for the year 1919 remaining unpaid other than this appeal; that the deficiency in tax against said corporation for the year 1919 in the amount as shown in the 60-day deficiency letters to the petitioners herein of $5,785.46 was duly assessed against said corporation on March 3, 1925; that attached hereto and made a part hereof is a true copy of an income and profits tax waiver filed with the respondent with respect to the year 1919.

Walter E. Hettman was the owner of record of eight and three-fourths (8-3/4) shares of stock in the National Engineering Corporation at the dissolution thereof. O. R. Kibele transferred said eight and three-fourths (8-3/4) shares to said Walter E. Hettman merely for the purpose of having said Walter E. Hettman represent him, said O. B. Kibele, at the meetings of the stockholders and directors of said National Engineering Corporation. Walter E. Hettman did represent O. B. Kibele at the meetings of the stockholders and directors of said National Engineering Corporation and upon dissolution of said National Engineering Corporation received $1,400.60, representing a proportion of the