Appeal of Estate of Kroeg

Board of Tax Appeals

Appeal of Estate of Kroeg

2 B.T.A. 722

CourtUnited States Board of Tax Appeals

DecidedSeptember 30, 1925

DocketDocket No. 2357

StatusPublished

Cited by1 cases

This text of 2 B.T.A. 722 (Appeal of Estate of Kroeg) is published on Counsel Stack Legal Research, covering United States Board of Tax Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Appeal of Estate of Kroeg, 2 B.T.A. 722 (bta 1925).

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Opinion

This is an appeal from the determination of a deficiency in estate tax in the amount of $515.17, and relates solely to questions of fact in connection with the valuation of the estate of the decedent.

FINDINGS OF FACT.

Andrew A. Kroeg died February 6, 1922, a resident of the City of Charleston, S. C. He was an attorney at law and during his lifetime handled large sums of money for numerous clients. At the time of his death his books and records were in a chaotic condition, and his administrators, John T. Witsell and Paul M. MacMillan, were unable to determine what would be the ultimate claims against the decedent. They duly filed a return for estate tax, in which they set forth a gross estate of $135,787.47, and deductions, including a specific exemption of $50,000, of $149,877.62, which, if correct, would show no taxable estate. The Commissioner audited the return so made by the administrators, increasing the gross estate to $143,383.45 and decreasing the deductions, including exemptions, to $92,624.78.

The principal difference between the deductions allowed by the Commissioner and the deductions claimed upon the return of the administrators related to the debts of the decedent, which the administrators claimed to be $83,043.91 and the Commissioner allowed at $25,791.07. It appears that the decedent, in connection with his law practice, had handled large sums of money for clients, particularly in connection with making investments for them on mortgage loans, [723]*723and in many instances appears to have so mingled their funds with his own as to give rise to large claims against the estate on account of funds entrusted to him for investment. Final determination of the total amount of allowable and allowed claims against the estate has not been made. At the time of the hearing, however, total claims allowed amounted to $48,783.67. There were also on file at the time of the hearing claims undetermined in the amount of $74,868.44, a large proportion of which are valid claims and in the course of time will be allowed.

The gross estate of the taxpayer did not exceed in value $135,787.47. The net value of the estate of the taxpayer was less than $50,000, exclusive of the exemption of that amount, and the decedent left no taxable estate.

DECISION.

The deficiency determined by the Commissioner is disallowed.

Aeundell not participating.

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This is an appeal from the determination of a deficiency in estate tax in the amount of $515.17, and relates solely to questions of fact in connection with the valuation of the estate of the decedent.

FINDINGS OF FACT.

Andrew A. Kroeg died February 6, 1922, a resident of the City of Charleston, S. C. He was an attorney at law and during his lifetime handled large sums of money for numerous clients. At the time of his death his books and records were in a chaotic condition, and his administrators, John T. Witsell and Paul M. MacMillan, were unable to determine what would be the ultimate claims against the decedent. They duly filed a return for estate tax, in which they set forth a gross estate of $135,787.47, and deductions, including a specific exemption of $50,000, of $149,877.62, which, if correct, would show no taxable estate. The Commissioner audited the return so made by the administrators, increasing the gross estate to $143,383.45 and decreasing the deductions, including exemptions, to $92,624.78.

The principal difference between the deductions allowed by the Commissioner and the deductions claimed upon the return of the administrators related to the debts of the decedent, which the administrators claimed to be $83,043.91 and the Commissioner allowed at $25,791.07. It appears that the decedent, in connection with his law practice, had handled large sums of money for clients, particularly in connection with making investments for them on mortgage loans, [723]*723and in many instances appears to have so mingled their funds with his own as to give rise to large claims against the estate on account of funds entrusted to him for investment. Final determination of the total amount of allowable and allowed claims against the estate has not been made. At the time of the hearing, however, total claims allowed amounted to $48,783.67. There were also on file at the time of the hearing claims undetermined in the amount of $74,868.44, a large proportion of which are valid claims and in the course of time will be allowed.

The gross estate of the taxpayer did not exceed in value $135,787.47. The net value of the estate of the taxpayer was less than $50,000, exclusive of the exemption of that amount, and the decedent left no taxable estate.

DECISION.

The deficiency determined by the Commissioner is disallowed.

Aeundell not participating.

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2 B.T.A. 722, Counsel Stack Legal Research, https://law.counselstack.com/opinion/appeal-of-estate-of-kroeg-bta-1925.

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