Wolder v. Commissioner

Wolder (defendant), an attorney, agreed to provide Boyce free legal services for the rest of her life in exchange for her promise to bequeath him certain securities if a company she held stock in merged; the merger occurred, Boyce received the shares plus cash from a later exchange, and upon her death, bequeathed all of it to Wolder as agreed. The Tax Court held the value of the bequest was taxable compensation for services, not a tax-exempt bequest.

Whether a bequest made in return for lifetime legal services constitutes taxable income.