28, 1932, plaintiff's father and mother created reciprocal trusts, each making the other a life beneficiary with remainder over to the plaintiff (taxpayer). On February 1, 1936, the latter purchased the respective life estates of his parents. At that time the value of the corpus of the trust created by his father was $561,573.84, the value of his mother's life estate therein was $93,060.87, the value of the corpus of the trust created by his mother was $561,546.69, and the value of his father's life estate therein was $104,349.26. Plaintiff paid to his father and mother respectively the value of their life estates. The corpus of both trusts consisted of corporate stock which was delivered to the plaintiff upon purchase, some of which was subsequently transferred to hischildren as a gift.


4
We think this brief statement is sufficient as a premise for the controverted issue. Plaintiff contends that he made a capital expenditure and acquired a capital asset or right which was wasting in value with time and, regardless of the fact that he was the remainderman, that he was entitled to recover the amount of his capital expenditure — his cost basis — by amortization over the life expectancies of his parents, that is, by ratable annual deductions from the amounts received by him each year as income as the result of his purchase. On the other hand, defendant (the government) contends that the purchase by plaintiff, the remainderman, of the life interest of his parents resulted in a merger of the two estates, particularly