The Estate of Keller et al. v. Commissioner of Internal Revenue, 1940 case revolved around the issue of estate tax liability. The Supreme Court was tasked with determining whether certain gifts made by a decedent prior to his death should be included in the gross estate for federal estate tax purposes. The decedent had transferred securities into a trust and retained an income interest for life, but died within three years of creating the trust without having received any income from it due to financial difficulties faced by the company whose stock constituted most of its assets. The court ruled that these transfers were not "bona fide sales" and thus fell under Section 302(c) of the Revenue Act which stipulates that if such transfer is made without adequate consideration and death occurs within two years, then it's deemed as though transfer was intended to take effect at or after death hence taxable under federal law.

The dissenting opinion in the case of Estate of Keller et al. v. Commissioner of Internal Revenue disagreed with the majority's ruling that certain assets transferred by a decedent prior to death were includable in his gross estate for federal tax purposes. The dissent argued that the majority had misinterpreted and incorrectly applied Section 811(c) of the Internal Revenue Code, which pertains to transfers intended to take effect at or after death. They contended that this section did not apply as there was no evidence suggesting such intent on part of the decedent when transferring these assets into a trust fund during his lifetime, nor any indication he retained control over them until his death. Therefore, they believed these assets should not be included in calculating estate taxes due.