Case Citation
Legal Case Name

Pascarelli v. Commissioner Case Brief

United States Tax Court1971Docket #16710668
1971 U.S. Tax Ct. LEXIS 164 55 T.C. 1082 Tax Evidence

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Case Brief Summary & Legal Analysis

General Brief
4 min read

tl;dr: A woman received substantial funds from her long-term romantic partner. The court determined the transfers were primarily gifts, not compensation for services, based on the transferor’s donative intent. The recipient was consequently held liable as a transferee for the unpaid gift tax on these amounts.

Legal Significance: The case exemplifies the application of the Duberstein “detached and disinterested generosity” standard to distinguish gifts from taxable income in the context of a long-term personal relationship. It also affirms a donee’s transferee liability for the donor’s unpaid gift tax.

Pascarelli v. Commissioner Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

Petitioner Lillian Pascarelli maintained a long-term, intimate relationship with Anthony DeAngelis, a married but separated businessman. From 1959 to 1963, they cohabited in a house owned solely by Pascarelli. During this period, DeAngelis transferred hundreds of thousands of dollars to Pascarelli directly, into a brokerage account in her name, and through payments for substantial improvements to her home. Pascarelli performed duties akin to a housewife and also hosted DeAngelis’s business associates. DeAngelis never filed gift tax returns for these transfers, and Pascarelli did not report them as income. The Commissioner issued deficiency notices presenting alternative theories: the transfers were either taxable compensation for services rendered by Pascarelli or gifts for which she was liable as a transferee for DeAngelis’s unpaid gift tax. At trial, the credibility of both Pascarelli and DeAngelis was severely undermined by their contradictory testimony and prior false statements under oath in a separate bankruptcy proceeding.

Court Holding & Legal Precedent

Issue: Are substantial funds and property transferred from a man to his long-term romantic partner, with whom he cohabited, considered taxable compensation for services or non-taxable gifts for which the donee incurs transferee liability for unpaid gift tax?

The transfers were predominantly gifts, not compensation. The court found that DeAngelis’s Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id es

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IRAC Legal Analysis

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Legal Issue

Are substantial funds and property transferred from a man to his long-term romantic partner, with whom he cohabited, considered taxable compensation for services or non-taxable gifts for which the donee incurs transferee liability for unpaid gift tax?

Conclusion

This case provides a significant judicial application of the fact-intensive Duberstein intent Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex e

Legal Rule

A transfer of property constitutes a gift for federal tax purposes if Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laboru

Legal Analysis

The court applied the standard from Commissioner v. Duberstein, focusing on the Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor i

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Flash Summary

  • Transfers from a businessman to his long-term companion were held to
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat

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