Irwin v. Gavit  Irwin v. Gavit, 268 U.S. 161 (1925), was a case before the U.S. Supreme Court regarding the taxability, under United States tax law, of a divided interest in a bequest. It is notable (and thus appears frequently in law school casebooks) for the following holding:  Under Anthony N. Brady's will, a sixth of his estate would be held in trust for his granddaughter until she turned 21. During this period, her father would receive some of the income on this principal—in other words, he held an income interest in a testamentary trust for 15 years, with the remainder to his daughter. The Collector viewed these payments as income, because they constituted the income on principal. Plaintiff argued they were exempt under §102(a) as property acquired by bequest. He sued the Commissioner of Internal Revenue (Irwin) in the United States District Court for the Northern District of New York, which found for the plaintiff. The Second Circuit affirmed. The Commissioner appealed to the Supreme Court. Is a gift of future income on an estate includable as income (because the bequest is made of the income of the estate and not the estate itself)? "[W]e can perceive no distinction relevant to the question before us between a gift of the fund for life and a gift of the income from it." The Code provision excluding gifts and bequests "assumes the gift of a corpus and contrasts it with the income arising from it, but was not intended to exempt income properly so-called. ... "  The Internal Revenue Code at the time provided that while the gains, profits and income "derived from any source whatsoever" was taxable, the value of property acquired by gift or bequest was not to be included in taxable income, and that trustees could be required to account for and withhold certain amounts for the payment of tax. Justice Holmes, writing for the majority, reasoned that the statute as then written required that the income received by trustees and paid to the remainderman be considered taxable income. Holmes held that although the receipt of the estate funds would be considered a non-taxable bequest, the receipt of income from those funds in installments is taxable. Under the statute:  The language quoted leaves no doubt in our minds that if a fund were given to trustees for A for life with remainder over, the income received by the trustees and paid over to A would be income of A under the statute. It seems to us hardly less clear that even if there were a specific provision that A should have no interest in the corpus, the payments would be income none the less, within the meaning of the statute and the Constitution, and by popular speech.