Frost v. Commissioner , 12 B.T.A. 1295 ( 1928 )

B. Y. FROST, WM. NELSON CROMWELL, AND WILLIAM J. CURTIS, EXECUTORS, ESTATE OF WALTER S. GURNEE, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Frost v. Commissioner

Docket No. 10441.

United States Board of Tax Appeals

12 B.T.A. 1295; 1928 BTA LEXIS 3364;

July 12, 1928, Promulgated

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Inheritance taxes paid by the executors to the States of New York and New Jerseyheld deductible from gross income of the estate.

Edward H. Green Esq., for the petitioners.

Maxwell E. McDowell, Esq., for the respondent.

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ARUNDELL

The respondent rejected a claim filed to abate a jeopardy assessment of income tax for the calendar year 1919 in the amount of $128.81. The deficiency results from the disallowance of claimed deductions for inheritance taxes paid to the States of New York and New Jersey.

FINDINGS OF FACT.

Petitioners' decedent, Walter S. Gurnee, died a citizen and resident of the State of New York in 1918. His will was probated in the Surrogate's Court in and for the County of Nassau, State of New York, and the executors of his estate were appointed by that court. The surviving executors so appointed are the petitioners in this proceeding.

In May, 1919, the executors paid to the State of New York the amount of $86,950.76 as an inheritance tax upon the estate of the decedent. The executors have neither applied for nor received a refund of the amount paid or any part thereof.

The executors paid to the State of New Jersey in March, 1919, the amount of $425.50 and in November, 1919, the further amount of $21,000 as an inheritance tax upon the estate of the decedent. On February 11, 1920, the State of New Jersey refunded the amount of $425.50 and on March 10, 1920, refunded the further amount of $7,573.20, thereby making the net payment $13,426.75.

The executors duly filed a return of the income of the estate for the year 1919. The respondent determined the taxable net income without allowing the deduction of either the amount of $86,950.76, paid to the State of New York, or the amount of $13,426.75, the net amount paid to the State of New Jersey.

OPINION.

ARUNDELL: Under the decision in , relating to inheritance taxes paid to the State of New York, and our decisions in , and , relating to similar taxes paid to the State of New Jersey, the petitioner are entitled to deduct from income of the estate for 1919 the taxes paid to those States in the respective amounts of $86,950.76 and $13,426.75. Aside from the authorities cited, the deductions here claimed are allowed under Section 703(a) of the Revenue Act of 1928.

Judgment will be entered under Rule 50.