Estate of Miller v. Commissioner

1968 T.C. Memo. 230, 27 T.C.M. 1140, 1968 Tax Ct. Memo LEXIS 68
CourtUnited States Tax Court
DecidedOctober 7, 1968
DocketDocket No. 7025-65,
StatusUnpublished

This text of 1968 T.C. Memo. 230 (Estate of Miller v. Commissioner) is published on Counsel Stack Legal Research, covering United States Tax Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Estate of Miller v. Commissioner, 1968 T.C. Memo. 230, 27 T.C.M. 1140, 1968 Tax Ct. Memo LEXIS 68 (tax 1968).

Opinion

Estate of Minnie Miller, deceased, Morris Miller, executor v. Commissioner.
Estate of Miller v. Commissioner
Docket No. 7025-65,
United States Tax Court
T.C. Memo 1968-230; 1968 Tax Ct. Memo LEXIS 68; 27 T.C.M. (CCH) 1140; T.C.M. (RIA) 68230;
October 7, 1968. Filed
Milton I. Baldinger and Arthur P. Scibelli, First Federal Savings Bldg., 608 13th St., N.W., Washington, D.C., for the petitioner. Francis J. Cantrel, for the respondent.

KERN

Memorandum Findings of Fact and Opinion

Respondent found an overassessment in the income tax liability of petitioner for the year ended March 31, 1963, in the amount of $2,136.27 and determined a deficiency in income tax for the year ended March 31, 1964, in the amount of $24,218.07. A small part of the deficiency thus determined results from the disallowance of certain amounts deducted on account of depreciation. *71 Respondent has conceded error in connection with his disallowance of such depreciation deductions. The overassessment and that part of the deficiency which is now at issue arise by reason of the following circumstances and adjustments: In January, 1963, Morris Miller, as executor and trustee, sold and conveyed a certain partnership interest in real estate belonging to decedent Minnie Miller, the wife of Morris, to a son of Minnie and Morris for a price approximately $1,000 in excess of the amount at which the interest sold was valued for estate tax purposes. Subsequent to such sale respondent's agents concluded and petitioner agreed that the valuation of this property should be increased for estate tax purposes to a figure greatly in excess of the price paid by decedent's son, resulting in a substantial capital loss being claimed by petitioner instead of the small capital gain which is originally reported. This adjustment resulted in respondent's determination of an overassessment for the fiscal year ended March 31, 1963. In the year ended March 31, 1964, petitioner sold other real estate owned by it for a price considerably in excess of its basis and deducted from the resulting capital*72 gain the capital loss carried over from the sale of the partnership interest in the preceding year. Respondent determined that there was no such deductible loss because of the provisions of section 267(a), Internal Revenue Code of 1954 and in an amended answer filed at the trial herein respondent alleged that no deduction on account of such loss should be allowed because of the provisions of section 165, I.R.C. 1954. In his reply brief respondent has conceded that section 267 of I.R.C. 1954 would not preclude deduction of the claimed loss in issue.

Findings of Fact

Some of the facts herein were stipulated. We find those facts to be as stipulated and incorporate herein by this reference the stipulation and the exhibits attached thereto.

Petitioner is the Estate of Minnie Miller, hereinafter referred to as the decedent, who died testate on April 8, 1961. She was survived by her husband, Morris Miller, by three adult children, Louis Miller, Ida Miller Furr and Gerald J. Miller, and by a number of grandchildren and great grandchildren. Decedent's Last Will and Testament was admitted to probate in the Orphans Court*73 of Montgomery County, Maryland, on June 20, 1961, and on the 1141 same day letters testamentary were granted to decedent's surviving husband, Morris. Morris has been engaged in the real estate business in Montgomery County for approximately 25 years.

Decedent's Will, after providing for a bequest to a family foundation and certain specific bequests of no moment in this case, provided for the balance of the residue to be divided by the executor or executors into three equal shares. One of these equal shares was bequeathed and devised in Paragraph IX of the Will as follows:

I give, devise and bequeath one (1) equal share, as determined by my executors under Paragraph VI to my husband Morris Miller, if he is alive, as sole trustee, and if he is not alive or does not care to act or does not appoint five (5) successor trustees upon his death, to Louis Miller, Gerald Miller, Ida Furr, Max Holtzman and Louis C. Grossberg, IN TRUST NEVERTHELESS, the following purposes:

(a) To distribute the income among my son Gerald Miller and the guardian of his children if any are not of legal majority. in such installments as shall be convenient for all parties concerned, but in any event at*74 least semi-annually, in such amounts and proportions as the trustees, other than my son Gerald Miller, shall determine in their sole and complete discretion, until the death of my son Gerald Miller.

(b) After the death of my son Gerald Miller, the trustees shall pay or turn over the trust estate to the spouse and blood or adopted children or grandchildren of any degree of my son Gerald Miller, and to any institutions organized exclusively for religious, charitable, educational or scientific purposes, in such amounts, estates or proportions, and in such manner, whether in trust or otherwise (except that he shall not create or grant another power of appointment) as my son Gerald Miller shall appoint in his last will and testament.

(c) If my son Gerald Miller fails by his last will and testament to exercise effectively the special power of appointment conferred in (b) immediately preceding, then the trustees are to pay the net income arising from such trust estate in equal shares to the guardian or guardians of the children born to or adopted by my son Gerald Miller as may survive my son Gerald Miller, if such child or children are under the age of twenty-one (21) years, to be used*75 for the benefit of such children of my son Gerald Miller, in such installments as shall be convenient for all parties concerned, but in any event at least once each year.

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Related

Marx v. Commissioner
5 T.C. 173 (U.S. Tax Court, 1945)
Campbell v. Commissioner
5 T.C. 272 (U.S. Tax Court, 1945)

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Bluebook (online)
1968 T.C. Memo. 230, 27 T.C.M. 1140, 1968 Tax Ct. Memo LEXIS 68, Counsel Stack Legal Research, https://law.counselstack.com/opinion/estate-of-miller-v-commissioner-tax-1968.