The Stone v. White case in 1936 revolved around the issue of whether a trust, created by Mrs. Ellen D. Sharpe for charitable purposes and managed by trustees (Stone et al.), was liable to pay federal income tax under the Revenue Acts of 1928 and 1932 or not. The Former Collector of Internal Revenue, White, argued that it was taxable while the trustees disagreed stating that it should be exempted as per Section 23(n) which allowed deductions for amounts transferred to organizations exclusively used for religious, charitable, scientific or educational purposes etc., from gross income. The Supreme Court ruled in favor of Stone et al., holding that such trusts were indeed exempted from taxation under these acts if they met certain conditions - primarily being operated exclusively for one or more specified beneficial purposes with no part of their net earnings benefiting any private shareholder or individual; unless when distributed within reasonable time limits set forth by Treasury Regulations.

In the dissenting opinion for the case of Stone et al., Trustees, v. White, Former Collector of Internal Revenue (1936), Justice McReynolds disagreed with the majority's interpretation of tax law and its application to charitable trusts. He argued that a trust created by Mrs. Ida S. Fuller did not qualify as an exemption from federal income taxes under existing laws because it was not exclusively used for religious, charitable or educational purposes but also provided financial benefits to her relatives during their lifetimes before any remaining funds were given to charity after their deaths. According to him, this dual purpose violated statutory requirements for tax exemptions on such trusts and should be subject to taxation accordingly.