U.S. Supreme Court RAYBESTOS-MANHATTAN v. U.S., 296 U.S. 60 (1935)

[Page 296 U.S. 60, 64]

and the same shift of the beneficiaries of it is effected simultaneously in a single document. No convincing reason is suggested why the act should be thought to tax the one and not the other.

The statute is thus not restricted in its application to rights to demand delivery of the stock such as the agreement vested in the stockholders of the two corporations. It embraces the more general one, inseparable from the transaction by which the obligation to issue the stock was created and which inhered in the two corporations by operation of law. Income is not any the less taxable income of the taxpayer because by his command it is paid directly to another in performance of the taxpayer's obligation to that other. See Douglas v. Willcuts, , 56 S.Ct. 59, decided this day; Old Colony Trust Co. v. Commissioner, 279 U.S. 716, 49 S.Ct. 499; United States v. Boston & Maine R.R., 279 U.S. 732, 49 S.Ct. 505. Here the power to command the disposition of the shares included the right to receive them and the exercise of the power which transferred the right is subject to the tax.

Affirmed.