In the case of Hartley v. Commissioner of Internal Revenue (1934), the U.S Supreme Court was tasked with determining whether a trust, created by a husband for his wife and children, could be taxed as part of his estate upon death. The trust in question allowed the husband to revoke or modify it at any time during his life but did not allow him to use its assets for personal benefit. Upon reviewing previous cases and tax laws, the court ruled that since he had retained power over disposition of property held in trust, it should be included in gross estate for taxation purposes after his death. This decision established an important precedent regarding how trusts are treated under federal tax law.

In the dissenting opinion for Hartley v. Commissioner of Internal Revenue, Justice Stone argued that the majority's decision was inconsistent with previous rulings and misinterpreted tax law. He contended that the decedent’s estate should not be taxed on income earned after death because it did not belong to him at his time of passing but rather belonged to his heirs or legatees who received it afterward. The justice believed this interpretation aligned more closely with Congress' intent when they enacted relevant tax laws, which he felt were designed to impose taxes on net incomes of individuals and corporations during their existence, not posthumously. Furthermore, he pointed out inconsistencies in how estates are treated under different sections of revenue acts due to varying interpretations by courts over time. This inconsistency could lead to confusion and unfair treatment among taxpayers according to Justice Stone.