In the Bender v. Pfaff case of 1930, the United States Supreme Court ruled on a tax dispute involving an inheritance. The decedent had left his estate to his wife and children in equal parts, but also stipulated that if any child died without issue before reaching age 45, their share would revert back to the surviving siblings or mother. One son predeceased this age limit with no offspring and thus his portion was redistributed among the remaining family members as per will instructions. However, when calculating taxes owed on these funds, Collector of Internal Revenue Bender argued they should be taxed at rates applicable during redistribution (which were higher), while Pfaff contended it should be based on rates at time of original death (lower). The court sided with Pfaff's interpretation stating that for taxation purposes, property interests are fixed at date of death unless explicitly contingent upon future events - which wasn't deemed true here since reversion was due to conditions set by deceased himself rather than external circumstances arising post-death.

In the dissenting opinion for Bender v. Pfaff, Justice Stone disagreed with the majority's interpretation of Section 302(c) of the Revenue Act of 1926. He argued that this section should not be read as a blanket exemption from taxation for all transfers made in contemplation of death but rather only those which are essentially testamentary in character. According to him, if Congress had intended such an expansive reading, it would have explicitly stated so instead of using language suggesting limitation and specificity. Furthermore, he contended that interpreting Section 302(c) as providing a broad exemption undermines its purpose - to prevent evasion or avoidance of estate taxes through lifetime gifts made in anticipation of death - by creating a loophole allowing individuals to avoid paying any tax on these transfers simply by making them irrevocable during their lifetime.