In the United States v. Ryerson et al., Executor, 1940 case, the Supreme Court ruled on a dispute over estate taxes. The decedent had transferred assets to his wife during his lifetime and retained income from those assets until death. After he died, the executors of his estate argued that these transfers were not taxable because they were completed before death. However, the Internal Revenue Service (IRS) disagreed and assessed an estate tax based on their value at time of death rather than when they were initially transferred. The Supreme Court sided with IRS stating that since decedent retained life interest in property given away inter vivos (during one's lifetime), it was part of gross estate for federal tax purposes under Section 302(c) of Revenue Act 1926 - even though no actual possession or enjoyment was reserved by him after transfer but only right to income therefrom till death. This decision established precedent for how such transfers are treated under U.S law: if a person retains some benefit from property during their lifetime after transferring it to another party, its full value can be included in their gross estate upon their demise.

In the dissenting opinion for United States v. Ryerson et al., Executor, Justice Black argued that the majority's decision was inconsistent with previous rulings of the Court and violated principles of equity. He contended that allowing a tax deduction for estate taxes paid to foreign governments on property located abroad, but not permitting a similar deduction for state inheritance taxes paid on domestic property, created an unjustifiable disparity. This discrepancy would result in double taxation of estates containing both domestic and foreign properties - once by state authorities and again by federal government through disallowance of deductions. The justice believed this interpretation contradicted earlier decisions which aimed at avoiding such double taxation scenarios under income tax laws. Furthermore, he pointed out that Congress had never explicitly stated its intention to treat estate taxes differently from income taxes in this regard; hence it was inappropriate for the court to infer such intent.