DocketNumber： Docket No. 25868.
Judges： Seawell
Filed Date： 11/13/1931
Status： Precedential
Modified Date： 11/2/2024
1931 BTA LEXIS 1595">*1595
24 B.T.A. 805">*805 The Commissioner determined a deficiency in estate tax of $375.73, which resulted from his increasing the value of certain real estate (which action, assigned as error, was abandoned at hearing) and shares of stock as returned by petitioner and the disallowance of a claimed debt deduction.
The case is submitted on the pleadings, testimony of one witness, and exhibits.
FINDINGS OF FACT.
The petitioner is the duly appointed, qualified and acting executrix of the estate of Albert J. Hopkins, who was a citizen of Illinois and died testate, August 23, 1922, a resident of the city of Aurora in that State.
The return of the petitioner showed an estate tax, paid, of $291.41. The Commissioner's determination of a deficiency in estate tax of $375.73 is due to his increasing petitioner's value, as returned, of 24 B.T.A. 805">*806 real estate $1,000; of 148 shares of stock of the Aurora Bleachery & Dye Works from $100 to $178.83 a share; 1931 BTA LEXIS 1595">*1596 of 60 shares of stock of the Merchants National Bank of Aurora, Ill., from $150 to $246 a share; of 3,000 shares of stock of Cornelia Consolidated Copper Company from 1 cent to 7 cents a share; and disallowing as a deduction the amount ($9,000) of four notes maturing after the death of the testator. One of the four notes was not signed by the decedent, but had his collateral attached thereto, and the other three were either signed or endorsed by him, with his collateral attached. All the notes were renewed by the petitioner as executrix and all except one was later paid by her out of estate funds. The one, not signed by the decedent and remaining unpaid, with collateral of decedent attached, is treated by the executrix in her return as a debt of the decedent and part of the deduction claimed as above indicated.
All four notes were originally executed for the use and benefit of decedent's son, who received cash therefor. The interest or share of the son in the decedent's estate was as much or more than the face value ($9,000) of the notes claimed as a deduction by the petitioner.
The Aurora Bleachery & Dye Works earned dividends of 11 per cent or 12 per cent in 1922, about1931 BTA LEXIS 1595">*1597 20 per cent in 1921, and in 1920 nearly 30 per cent. The sales of its stock ranged from $150 to $220 per share. The book value of the same was $178.83. Some stock was sold within a few weeks of the death of the decedent at $220 a share.
The book value of the Merchants National Bank stock was the value placed on it by the Commissioner. The evidence fails to show satisfactorily other value. As to the value of the stock of the Cornelia Consolidated Copper Company, no evidence was adduced by the petitioner.
OPINION.
SEAWELL: With reference to the value of the stocks which were given a higher value by the respondent than was returned by the petitioner, the issue is one of fact. The correctness of the determination of the respondent as to the value of the stock in question is presumed and there is no evidence adduced sufficient to overcome the same.
The evidence shows that the four notes, amounting to $9,000 and claimed as a deduction, did not mature until after decedent's death; that they were made for the son's benefit and that the decedent's liability thereon was contingent upon the son's failure to pay the same; and that the son would be liable to his father in the1931 BTA LEXIS 1595">*1598 amount of the notes if he had to pay same because of his son's failure to do so. The evidence further indicates that the son's share in his father's 24 B.T.A. 805">*807 estate was of as much or more than the face value of the notes. In the circumstances of the case, it is not shown that the estate will eventually sustain any loss by reason of the contingent liability which rested on decedent or his estate by reason of his contingent liability on said notes.
If the estate is compelled to pay all of said notes, it will have the right to subrogation and may recover the amount from the son by subjecting his interest in his father's estate to the satisfaction of the same.
For lack of evidence sufficient to overcome the presumption of the correctness of the respondent's determination, it is approved.