Tax Legal Services · Primary-source case analysis

Corliss: Revocable-Trust Income Remained Taxable to the Grantor Who Controlled It

By Aneeta Mishra and Timothy Chan

Published May 21, 2026

Decision: Corliss v. Bowers, 281 U.S. 376 (1930).

Corliss v. Bowers concerned a fund transferred to trustees for the grantor’s wife for life and then his children, while the grantor reserved power to modify, alter, or revoke the trust.

Actual command mattered more than formal title

The tax analysis looked to practical power over the property and its income rather than formal title alone.

The revocation power preserved control

Because the grantor could abolish or change the trust at will, the income remained within his unfettered command.

Payment to the wife did not shift the tax

Another person enjoyed the income only because the grantor chose not to exercise his retained power during that period.

Unused power was still taxable control

The Court treated unrestricted command as the relevant benefit whether or not the grantor exercised it in the taxable year.

Key takeaways

• Document every retained amendment and revocation power.
• Distinguish legal title from practical command over income.
• Trace who can redirect or currently enjoy the property.
• Apply the current grantor-trust statutes and regulations to the instrument.