39 T.C. 580">*581 The respondent determined deficiencies in the petitioner's income tax for the years 1953 through 1956 as follows:

The issues in these consolidated cases are (1) whether the years 1953, 1954, and 1955 are barred by the statute of limitations; (2) whether a purported accord and satisfaction in 1957 prevents respondent from making further adjustments in petitioner's income taxes in1962 U.S. Tax Ct. LEXIS 5">*12 the years 1953, 1954, and 1955; (3) whether certain amounts received by petitioner in the years 1953, 1954, and 1955 constitute income in respect of a decedent within the meaning of sections 126 of the Internal Revenue Code of 1939 and 691 of the Internal Revenue Code of 1954, or whether such payments are testamentary bequests excludable from income; (4) whether the payments thus received by petitioner in 39 T.C. 580">*582 1955 should include the amount of $ 30,184.95 in addition to the $ 19,815.05 reported by the petitioner; (5) whether the taxation of these payments in the years 1953, 1954, and 1955 as income in respect of a decedent would be unconstitutional; (6) whether petitioner was entitled to a deduction in excess of that allowed by respondent for the estate tax applicable to the payments received by petitioner in the years 1953, 1954, and 1955; and (7) whether the payment received by petitioner in 1956 from Willis, Faber & Dumas, Ltd., was a gift.

By an amendment to his answer in Docket No. 80418 respondent claims (as an alternative to issue No. 4 above) an increase in the deficiency for 1956 "to allow the inclusion in income the amount of $ 30,184.95, which is the amount withheld1962 U.S. Tax Ct. LEXIS 5">*13 by the executor of the estate of J. Wilfred Findlay and utilized by petitioner" in an agreement executed by her in 1956.

FINDINGS OF FACT.

Some of the facts were stipulated and they are herein included by this reference.

Helen Rich Findlay, hereinafter sometimes called the petitioner, is a resident of New York, N.Y. Petitioner filed her income tax returns for the years 1953 through 1956 with the district director of internal revenue, Manhattan District, New York, N.Y. During these years petitioner kept her books and prepared her returns on a cash basis.

Petitioner was 69 years old at the time of the trial. She married J. Wilfred Findlay in 1919 and remained married to him until 1948 when they were divorced. Findlay then married Lois Elliman. He died in 1951 and Lois subsequently married Irving S. Wright. For many years prior to his death in 1951, J. Wilfred Findlay solicited insurance business on behalf of Willis, Faber & Dumas, Ltd., insurance brokers and underwriters of London, England, for which he received commissions. He was also a member of a partnership in New York City that was engaged in the insurance business. On or about March 27, 1936, J. Wilfred Findlay and Willis, 1962 U.S. Tax Ct. LEXIS 5">*14 Faber & Dumas, Ltd., entered into a commission agreement which provided in part as follows:

(a) In the event of my death (J. W. F.) commission to be applied to all business transacted in the current year in which death occurred, and (b) for succeeding 5 years (c) thereafter commission to be 25% of existing commission, but limited to # 1,500. (d) all payments to cease either on death of my wife (Mrs. F.) or 1955, whichever occurs first.

J. Wilfred Findlay died on May 31, 1951, a citizen of the United States and resident of New York, leaving a Last Will and Testament dated February 17, 1949, which was duly admitted to probate in the Surrogate's Court of the County and State of New York. The will provided, in part, as follows:

39 T.C. 580">*583 Third: All of the commissions and other payments payable to my Executor by Willis, Faber & Dumas, Ltd., of 54 Leadenhall Street, London, E.C. 3, England, pursuant to a memorandum dated the 27th day of March, 1936, and any subsequent memorandum or agreement hereinafter entered into regarding the payment of the same, I give, and bequeath as follows:

Fifty (50%) per cent thereof to my wife, Lois Elliman Findlay:

Fifty (50%) per cent thereof to my former1962 U.S. Tax Ct. LEXIS 5">*15 wife, Helen Rich Findlay.

* * * *

Fourth: (a) All the rest, residue and remainder of my estate, real and personal, of whatsoever kind and wheresoever situate, of which I may die seized or possessed, and any property over which I shall have any power of disposition, I give, devise and bequeath to my wife, Lois Elliman Findlay.

An agreement dated May 6, 1952, was executed by petitioner, Lois E. Findlay, and the Schroder Trust Co. (a New York corporation), as executor of the will of J. Wilfred Findlay, under which the Schroder Trust Co. purported to assign the testator's rights to commissions payable by Willis, Faber & Dumas, Ltd., to petitioner and Lois E. Findlay. The agreement provides, in part, as follows:

Whereas the said Testator under Article Third of said Last Will and Testament did bequeath all of the commissions and other payments payable to his executor, pursuant to a certain contract between himself and Willis, Faber & Dumas, Ltd. of No. 54 Leadenhall Street, London, E.C. 3, England unto the parties of the first part, share and share alike, a copy of which agreement is annexed hereto and made a part hereof; and

Whereas the parties are agreed that said bequest constitutes1962 U.S. Tax Ct. LEXIS 5">*16 a specific legacy of the testator's rights under said contract and of the benefits therein provided, and the said party of the second part [Schroder Trust Co.] is therefore willing to assign unto the parties of the first part [Lois Elliman Findlay and Helen Rich Findlay], and the parties of the first part are willing to receive an assignment of the testator's rights under said agreement in satisfaction of said bequest; * * *

On May 29, 1952, a contract was executed by petitioner, Lois Elliman Findlay, the Schroder Trust Co., the Standyards Agency, Ltd. (London, England), the General Assets & Agency Co., Ltd. (London, England), and Willis, Faber & Dumas, Ltd., under which the petitioner and Lois Elliman Findlay agreed to accept $ 150,000 each in settlement of the obligations of Willis, Faber & Dumas, Ltd., under the agreement of March 27, 1936. Payment to each was to be made in two equal installments, one in 1952 and one in 1953 (but not later than May 31, 1953). The contract of May 29, 1952, recited that in view of certain ambiguities in the construction of the March 27, 1936, agreement and in view of uncertainties as to the future of said agreement, the parties of the May 29, 1952, 1962 U.S. Tax Ct. LEXIS 5">*17 contract "agreed upon the sum of Three Hundred Thousand Dollars ($ 300,000) as the fair amount for which they are willing to settle and liquidate said indeterminate contract."

39 T.C. 580">*584 A supplemental agreement dated November 11, 1953, was executed by the same parties to modify the details of payment of the May 29, 1952, contract so that the sums payable would be as follows:

(a) $ 50,000 each to Lois Elliman Wright and Helen Rich Findlay upon the execution and delivery of these presents;

(b) $ 25,000 each to Lois Elliman Wright and Helen Rich Findlay on January 10, 1954;

(c) $ 25,000 each to Lois Elliman Wright and Helen Rich Findlay on December 10, 1954; and

(d) $ 50,000 each to Lois Elliman Wright and Helen Rich Findlay on January 10, 1955;

Provided, however, That no payments need be made under clauses (c) and (d) above unless and until evidence satisfactory to [Willis, Faber & Dumas, Ltd.] has been furnished to it by Schroder Executor & Trustee Company, Ltd., as Ancillary Administrator with the Will Annexed of the Estate of J. Wilfred Findlay, that all British death duty on said Estate has been paid in full; and provided further that in case, prior to December 10, 1954, said1962 U.S. Tax Ct. LEXIS 5">*18 Ancillary Administrator shall certify to [Willis, Faber & Dumas, Ltd.] that British estate assets available to the Ancillary Administrator * * * are insufficient to pay all British death duty on said estate, together with the amount required to pay any deficiency therein, then and in such event [Willis, Faber & Dumas, Ltd.] shall forthwith pay to said Ancillary Administrator the amount so required to pay such deficiency (but not in excess of $ 150,000), and thereupon the obligations of [Willis, Faber & Dumas, Ltd.] to make payments under clauses (c) and (d) above to Lois Elliman Wright and Helen Rich Findlay shall be reduced by the amount so paid to the Ancillary Administrator. * * *

Petitioner received payments from Willis, Faber & Dumas, Ltd., of $ 50,000 in each of the years 1953 and 1954 and $ 19,815.05 in 1955 pursuant to the agreements dated May 29, 1952, and November 11, 1953.

The commuted value of the commissions payable by Willis, Faber & Dumas, Ltd., under the agreement of March 27, 1936, in the amount of $ 268,091.30, was included in the estate of J. Wilfred Findlay.

Pertinent figures on the final audit of the estate tax return on the Estate of J. Wilfred Findlay were 1962 U.S. Tax Ct. LEXIS 5">*19 as follows:

A certification of United Kingdom Estate Duty dated June 3, 1954, was submitted to the district director of internal revenue, Manhattan District, New York, N.Y., on August 9, 1954, by the Schroder Trust Co. as executor of the estate of J. Wilfred Findlay, certifying to the 39 T.C. 580">*585 payment in full of # 40,779. 5s. 7d. ($ 114,181.98) in estate duty to Great Britain. The certificate indicates that the rate of tax on the described assets (which included the right to commissions under the March 27, 1936, agreement) was 45 percent; and it is stipulated that 45 percent of the value of the right to the commissions, as listed on the certificate, would be $ 92,429.76. ¹

1962 U.S. Tax Ct. LEXIS 5">*20 On August 24, 1956, petitioner, Lois E. Wright, Schroder Trust Co., as executor of the will of J. W. Findlay, and Richard Remsen and Schroder Trust Co., as trustees under an indenture of trust dated January 6, 1948, entered into an agreement for the apportionment of estate taxes. The agreement stated that whereas (1) the petitioner had, by letter agreement dated September 26, 1951, deposited with the Schroder Trust Co. $ 101,000 in cash and bonds as a deposit against the liability for estate taxes; (2) J. Wilfred Findlay had established a trust (as part of a separation agreement in 1948) with income to himself for life and upon his death the trust fund to be divided into two equal parts, one equal part to be retained in trust with income to petitioner for life and remainder to the settlor's estate, the other equal part to be paid over to petitioner absolutely, less such portion thereof as might be equivalent to the proportioned part of estate and inheritance taxes attributable to the part so payable to petitioner; (3) the trustees of said trust, in paying over one equal part of the trust fund to petitioner, absolutely, withheld the sum of $ 43,642.42 until the estate, inheritance, 1962 U.S. Tax Ct. LEXIS 5">*21 and succession taxes attributable to petitioner could be ascertained; (4) the British death duty, the Federal estate tax, and other taxes had been paid or ascertained; and (5) there was disagreement among the parties with respect to the apportionment of such death duty and taxes, it was agreed as follows:

First: Upon the execution of this Agreement, Helen Rich Findlay has paid to the Executor the sum of $ 54,055.27 as the full net amount apportionable against her individually (after credit for amounts withheld to pay British estate duty out of moneys due Helen Rich Findlay from Willis, Faber & Dumas, Ltd.) with respect to British death duty and Federal and New York estate taxes, on the bequest to her under the will and also the one equal part of the trust fund payable to her absolutely. Accordingly, Schroder Trust Company has released and delivered to Helen Rich Findlay all assets held by it under said letter agreement dated September 26, 1951, and the Trustees have released and delivered to her from trust principal the assets listed in Annex A hereto, being the share of the trust fund now represented by the funds heretofore withheld from her by the Trustees and invested as a part1962 U.S. Tax Ct. LEXIS 5">*22 of the trust fund, such share being computed as set forth in Annex A.

On or about September 6, 1956, petitioner received $ 16,425 from Willis, Faber & Dumas, Ltd., together with a letter to her dated August 23, 1956, signed by a director, which stated, in part, as follows:

39 T.C. 580">*586 our legal obligations under [the March 27, 1936] agreement were fully discharged by the settlement made in 1951 and the only question which could remain was whether there might still be some moral obligation to you, having regard to the way things had worked out since that time.

My Board have again had the figures under review and, having in mind the fact that the income accruing to this Company out of the American business introduced by the late J. W. Findlay had been so satisfactory and had so far exceeded our expectations, they feel morally bound to make some provision for Mrs. Lois Wright and yourself.

The payment of $ 16,425 to petitioner was made pursuant to a resolution of the board of directors of Willis, Faber & Dumas, Ltd., which was passed on August 7, 1956, and which stated, in part, as follows:

Arising out of his visit to New York, 1962 U.S. Tax Ct. LEXIS 5">*23 it was reported by Mr. G. B. Wilson that he had seen the solicitors representing Mrs. Helen Findlay and Mrs. Lois Wright (formerly Findlay) and had undertaken to bring before the Board the question of making some provision for them in the future.

He reminded the Board that in 1951 a settlement had been made with the Findlay estate which took into account the fact that further payments would almost certainly have to be made to Findlay's dependants. This was considered to be necessary both in relation to the continuance of the business connections developed by the late J. W. Findlay and the preservation of the Company's reputation in the U.S.A. and the view then taken now appears to be confirmed. Accordingly it was

Resolved

that subject to any further resolutions of the Board on the matter, there be paid annually to Mrs. Helen Findlay $ 16,425 and annually to Mrs. Lois Wright $ 13,500.

The members of the board of directors of Willis, Faber & Dumas, Ltd., comprised all of the ordinary shareholders of the firm. The firm had an established policy of making provision for the widows of deceased officers and employees.

Petitioner and J. Wilfred Findlay were for many years close personal1962 U.S. Tax Ct. LEXIS 5">*24 friends of several of the principal men in Willis, Faber & Dumas, Ltd., including Felix Douglas-Whyte (senior life director), and his wife; David Willis (director), and his wife; and Leonard Southall (chief underwriter), and his wife.

Petitioner noted the receipt of the $ 16,425 on her income tax return for 1956 but claimed that it was a nontaxable gift. Willis, Faber & Dumas, Ltd., was allowed a deduction for this payment for British tax purposes.

Prior to the expiration of the statute of limitations petitioner signed consent forms (Form 872) extending the time for assessment of taxes for the years 1953, 1954, and 1955 to June 30, 1960. Respondent also signed these consent forms prior to the expiration of the period of limitations for the 3 years. Respondent mailed the statutory notice of deficiency for these 3 years to petitioner on March 25, 1960. Respondent 39 T.C. 580">*587 did not return signed copies of Form 872 to petitioner or her representative until June 1, 1960.

Petitioner included in income the payments received from Willis, Faber & Dumas, Ltd., of $ 50,000 in each of the years 1953 and 1954 and $ 19,815.05 in 1955.

Petitioner claimed deductions in the years 1953, 1954, and1962 U.S. Tax Ct. LEXIS 5">*25 1955 in the respective amounts of $ 13,011.67, $ 13,011.67, and $ 5,156.53, which were described as the Federal estate tax attributable to the payments received from Willis, Faber & Dumas, Ltd., in the respective years. Claims for refund dated April 11, 1958, were filed on May 27, 1959, claiming the said $ 50,000 reported in 1953 and 1954 and $ 19,815.05 in 1955 were not taxable income.

Respondent in his statutory notice of deficiency stated that the "issue raised in each of your claims for refund, requesting the elimination from your 1953, 1954, and 1955 tax returns of reported net income which you received under the will of J. Wilfred Findlay, has been given careful consideration and it has been determined that the elimination is not allowable." Respondent also disallowed a portion of the deductions claimed by petitioner in the years 1953, 1954, and 1955 (for Federal estate taxes attributable to the payments from Willis, Faber & Dumas, Ltd.) in the respective amounts of $ 8,447.61, $ 8,447.61, and $ 592.47. Respondent also stated that in the event the receipts from Willis, Faber & Dumas, Ltd., are not taxable income, the deduction for estate taxes would not be allowable. For 1962 U.S. Tax Ct. LEXIS 5">*26 the year 1955 respondent included an additional $ 30,184.95 in petitioner's income for that year with the explanation that "This sum is deemed to have been received by you from Willis, Faber and Dumas, Ltd. and is taxable to you within the provisions of Section 61 (a) and/or Section 691(a) of the 1954 Code."

For the year 1956 respondent determined that the amount of $ 16,425 received by petitioner from Willis, Faber & Dumas, Ltd., in that year was taxable income.

OPINION.

The first issue is whether the years 1953, 1954, and 1955 are barred by the statute of limitations. The record shows that petitioner signed consents for each of the 3 years extending the period of assessment of tax for these years to June 30, 1960, and respondent also signed them. Both parties signed the consent form prior to the expiration of the statute of limitations on the 3 years. Petitioner does not dispute these facts, but argues that the consents were ineffective because respondent failed to return the signed consent forms to petitioner prior to the expiration of the statute of limitations.

Section 6501(c)(4) of the Internal Revenue Code of 1954 provides that "Where, before the expiration of the time1962 U.S. Tax Ct. LEXIS 5">*27 prescribed in this 39 T.C. 580">*588 section for the assessment of any tax imposed by this title * * * both the Secretary or his delegate and the taxpayer have consented in writing to its assessment after such time, the tax may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon." ²

There is no requirement in the statute that the consent must be signed by respondent and returned to the taxpayer prior to the expiration of the limitations period. In Stern Brothers & Co., 17 B.T.A. 848">17 B.T.A. 848, affd. 51 F.2d 1042 (C.A. 8), where the validity of consent extending the limitations period was in issue, the Board said:

Notice by the Commissioner of his acceptance of consents is 1962 U.S. Tax Ct. LEXIS 5">*28 not necessary to their validity. Greylock Mills, 9 B.T.A. 1281">9 B.T.A. 1281; affd., 31 Fed. (2d) 655. The statute provides that if the taxpayer and the Commissioner consent in writing the tax may be assessed within the period agreed upon. The consents were sent to the petitioner by the Commissioner with a request that they be executed; they were signed and were returned to the Commissioner and were then signed by him. They were then valid consents under the statute. * * *

To the same effect, House v. Commissioner, 97 F.2d 516 (C.A. 2). ³ We sustain respondent on this issue.

The1962 U.S. Tax Ct. LEXIS 5">*29 next issue is whether respondent is precluded from determining deficiencies for the years 1953, 1954, and 1955 because of a purported "accord and satisfaction" covering these years which is binding on the parties. After administrative review of petitioner's returns by respondent it was determined early in 1957 that there were overassessments in petitioner's income taxes for 1953, 1954, and 1955 in the respective amounts of $ 184.96, $ 180.16, and $ 55.38. Petitioner agreed to the overassessments in these amounts ⁴ and respondent paid these amounts to petitioner in 1957.

Petitioner argues that when she formally accepted the respondent's adjustments resulting in small overassessments for these 3 years by signing1962 U.S. Tax Ct. LEXIS 5">*30 the waiver of restrictions on assessment and agreement to assessment, there arose a "completed accord and satisfaction over the dispute." In Auerbach Shoe Co., 21 T.C. 191">21 T.C. 191, affd. 216 F.2d 693, the taxpayer made a similar argument that its execution of a "Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment" for two of its tax years amounted to an account stated between the parties which precluded respondent 39 T.C. 580">*589 from asserting any further liability for those years. We rejected this argument stating that "In order to bind the Government and to preclude it from asserting a further liability it is necessary for the petitioner here to show that it entered into a compromise or closing agreement with the respondent in the manner provided by the [1939] Internal Revenue Code (secs. 3760 and 3761). Joyce v. Gentsch, 141 F.2d 891 (C.A. 6, 1944). See Payson v. Commissioner, 166 F.2d 1008 (C.A. 2, 1948), and Bank of New York v. United States, 170 F.2d 20 (C.A. 3, 1948)." 1962 U.S. Tax Ct. LEXIS 5">*31 ⁵ We sustain the respondent on this issue.

The next issue is whether the payments received by petitioner from Willis, Faber & Dumas, Ltd., the insurance brokers and underwriters in London, England, in 1953, 1954, and 1955 in the respective amounts of $ 50,000, $ 50,000, and $ 19,815.05 are taxable to her under sections 126 of the Internal Revenue Code of 1939 and 691 of the Internal Revenue Code of 1954⁶ as income in respect of a decedent. Petitioner contends they are excludable testamentary bequests.

1962 U.S. Tax Ct. LEXIS 5">*32 39 T.C. 580">*590 Section 691 of the Internal Revenue Code of 1954 provides that the "amount of all items of gross income in respect of a decedent which are not properly includible in respect of the taxable period in which falls the date of his death or a prior period * * * shall be included in the gross income, for the taxable year when received, of: (A) the estate of the decedent, if the right to receive the amount is acquired by the decedent's estate from the decedent; (B) the person who, by reason of the death of the decedent, acquires the right to receive the amount, if the right to receive the amount is not acquired by the decedent's estate from the decedent; or (C) the person who acquires from the decedent the right to receive the amount by bequest, devise, or inheritance, if the amount is received after a distribution by the decedent's estate of such right."

Petitioner attacks the constitutionality of these sections, stating that the "taxation of bequests as 'income in respect of decedents' by Sections 126(a) of the 1939 Code and 691(a)(1) of the 1954 Code is in this case a tax on principal of the decedent's estate" and "As such it is a direct tax not apportioned as required by Article1962 U.S. Tax Ct. LEXIS 5">*33 I, Section 2, Clause 3, and Article I, Section 9, Clause 4 of the Constitution." It has been held that section 126(a) of the Internal Revenue Code of 1939 imposes a tax on income rather than on principal, and is therefore within the scope of the 16th amendment. Estate of Fred Basch, 9 T.C. 627">9 T.C. 627; Richardson, Jr. v. United States, 294 F.2d 593.

In 1936 J. Wilfred Findlay, who for years had solicited insurance on a commission basis for Willis, Faber & Dumas, Ltd., entered into a commission agreement with them which set out the terms and duration of payment after his death of commissions from his business. These payments were to cease "either on death of my wife (Mrs. F.) or 1955, whichever occurs first." Petitioner and J. Wilfred Findlay were divorced in 1948 and Findlay subsequently married Lois Elliman. J. Wilfred Findlay died in 1951 and in his will bequeathed 50 percent of the commissions payable under the 1936 agreement to his wife Lois and 50 percent to his former wife, petitioner. In 1952 petitioner and Lois Elliman Findlay agreed to accept $ 150,000 each in settlement of the obligations of Willis, Faber & Dumas, 1962 U.S. Tax Ct. LEXIS 5">*34 Ltd., under the 1936 agreement.

It is immaterial that the petitioner received the payment of these commissions under the settlement agreement. Petitioner's claim was essentially derived from the 1936 commission agreement executed by the decedent (and, of course, from the will) and the taxable nature of any amount recovered by petitioner in settlement of her claim depends upon the nature of the claim. Chalmers Cullins, 24 T.C. 322">24 T.C. 322.

We believe it is quite evident that the payments thus received by petitioner in 1953, 1954, and 1955 were "income in respect of a decedent" 39 T.C. 580">*591 within the meaning of the pertinent statutory sections. Section 126 of the Internal Revenue Code of 1939 was enacted in 1942 primarily to prevent the "bunching" of income in a decedent's last taxable period by including in income amounts which ordinarily would be receivable over a period of several years. S. Rept. No. 1631, 77th Cong., 2d Sess., 1942-2 C.B. 504, 580. ⁷ The commissions here involved were not payable until after Findlay's death and therefore were not properly includable in his income for his last taxable period. It is uncontrovertible1962 U.S. Tax Ct. LEXIS 5">*35 that similar commissions received by Findlay during his life from his insurance business were taxable as ordinary income. Consequently, commissions paid to petitioner after decedent's death retained their nature as ordinary income. See S. Rept. No. 1631, supra, 1942-2 C.B. 580.

In Frances E. Latendresse, 26 T.C. 318">26 T.C. 318, affd. 243 F.2d 577, this Court held that renewal commissions1962 U.S. Tax Ct. LEXIS 5">*36 paid to a widow on insurance policies sold by her husband prior to his death and similar commissions acquired by the husband were taxable to the widow as ordinary income under section 126 of the Internal Revenue Code of 1939. This Court stated that the renewal commissions on the policies written by decedent would clearly have been taxable to him as ordinary income had he lived, and accordingly, those commissions would be taxable to the widow as ordinary income under section 126. As to the contingent renewal commissions purchased by decedent from another agent, the Court again stated that "Such renewal commissions, being contingent upon payment at a future date by the insured persons, were not payable and were not properly includible in respect of the taxable period in which fell the date of decedent's death or a prior period. Accordingly, they constitute ordinary income taxable to Frances in the year of receipt, under section 126(a) of the Internal Revenue Code of 1939." We think the Latendresse case is applicable to the case before us in that both involve commissions which would be ordinary income if received in decedent's lifetime, and were not due or payable until after 1962 U.S. Tax Ct. LEXIS 5">*37 decedent's death. See also United States v. Ellis, 264 F.2d 325.

Petitioner argues that the agreements executed on May 6, 1952, May 29, 1952, and the supplemental agreement of November 11, 1953, constituted a transfer of the claim to the commission income by the estate to the petitioner and Lois within the meaning of section 126(a)(2) of the Internal Revenue Code of 1939. Section 126(a)(2), 39 T.C. 580">*592 which is substantially the same as section 691(a)(2) of the Internal Revenue Code of 1954, provides as follows:

SEC. 126. INCOME IN RESPECT OF DECEDENTS.

(a) Inclusion in Gross Income. --

* * * *

(2) Income in case of sale, etc. -- If a right, described in paragraph (1), to receive an amount is transferred by the estate of the decedent or a person who receives such right by reason of the death of the decedent or by bequest, devise or inheritance from the decedent, there shall be included in the gross income of the estate or such person, as the case may be, for the taxable period in which the transfer occurs, the fair market value of such right at the time of such transfer plus the amount by which any consideration for the transfer exceeds such1962 U.S. Tax Ct. LEXIS 5">*38 fair market value. For the purposes of this paragraph, the term "transfer" includes sale, exchange, or other disposition, but does not include a transfer to a person pursuant to the right of such person to receive such amount by reason of the death of the decedent or by bequest, devise, or inheritance from the decedent.