Security Trust Co. v. Commissioner

*983 This appeal is from the determination of a deficiency in respect of an estate tax in the amount of $13,544.88.

FINDINGS OF FACT.

Mary Caplis, a resident of Michigan, died testate on January 3, 1924. Her last will and testament provided that the rest and residue of her estate after the payment of certain bequests not material here, should be held by the Security Trust Company of Detroit, Mich., as trustee, the income therefrom to be paid to the decedent's brother, Thomas McCreery, for and during the period of his natural life, and that upon the death of Thomas McCreery the residue of the trust property should be paid over to the Roman Catholic Church of the Diocese of Detroit, Mich., to be disposed of under the direction of the Bishop of such diocese. The last will and testament of the decedent also provided that if, on account of accident, illness, or other extraordinary circumstances, the trustee deemed such*2134 action advisable, it was authorized to use for the benefit of said Thomas McCreery such portions of the corpus of said trust property as it might deem proper.

The executor of the estate of Mary Caplis, during the administration of said estate, paid to one Thomas Markey the amount of $1,500, which was owing to him by the said May Caplis on a certain promissory note. The payment of said note by said executor was approved by the Probate Court for Wayne County, Mich., in which the administration of said estate was pending, on November 10, 1925.

The Commissioner, upon audit of the Federal estate-tax return filed for the estate of May Caplis, refused to allow as deductions *984 from the gross estate the amount of $324,825.98, representing the residue of the estate aforesaid, and the amount of $1,500 paid by the executor to the said Thomas Markey, and determined that there is a deficiency in tax in the amount of $13,544.88.

OPINION.

MARQUETTE: The amount of $1,500 paid by the executor of the estate of Mary Caplis to Thomas Markey, as set forth in the findings of fact, should be allowed as a deduction in determining the net estate subject to the Federal estate tax. At*2135 the hearing, the petitioners abandoned their claim for the deduction of the amount of $324,825.98, representing the residue of decedent's estate now held by the Security Trust Co. as trustee under the terms of the decedent's last will and testament.

Order of redetermination will be entered on 15 days' notice, under Rule 50.