Washington Law Review


P won $25,000 for the best symphony entered in a contest sponsored by a philanthropist. P composed his symphony during a three year period, 1936 to 1939, entered the contest and won the prize in 1947. The sponsor of the award derived no profit from the contest nor from P's participation in it. The Commissioner of Internal Revenue ruled that the entire award was taxable as income and under I.R.C. § 107(b), to be computed as though the award had been ratably received over the three year period ending with 1947. P filed a claim for refund on the ground that the prize constituted a gift under I.R.C. § 22(b) (3) which excludes gift from gross income as defined under I.R.C. § 22(a). The district court held that it was a gift. Robertson v .U.S., 93 F. Supp. 660 (D. Utah 1950). The Court of Appeals reversed, holding that the award was taxable as income. U.S. v. Robertson, 190 F. 2d 680 (C.A. 10th 1951). Certiorari granted because of a conflict between this case and McDermott v. Commissioner, 150 F. 2d 585 (App. D.C. 1945). Held: Affirmed. Acceptance by contestants of the offer tendered by the sponsor of a prize contest creates an enforceable contract. Payment of the prize offered to the winner, of the contest is the discharge of a contractual obligation and therefore not excludable from gross income as property received as a gift. Robertson v. U.S., 343 U.S. 711 (1952).

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