Helvering v. Horst, 311 U.S. 112 (1940), is an opinion of the United States Supreme Court which further developed the “fruit-and-tree” metaphor established in Lucas v.

[3] The issue before the Court was whether the gift of interest coupons, during the donor’s taxable year, detached from the bonds, is considered as the realization of income taxable to the donor,[3] or if the gift of the coupons effectively diverts the payments of interest to the donee.

The Court held that Paul Horst was liable for income tax on the interest payments received by his son.

[2][3] The court stated “[t]he taxpayer has equally enjoyed the fruits of his labor or investment and obtained the satisfaction of his desires whether he collects and uses the income .

A taxpayer who is normally taxable only on the receipt of interest payments cannot escape taxation by giving away his right to such income.