EC, 

## NET GENEIRAL

~,~ June 16, 1967
Honorable Robert S. Calvert Comptroller of Public Accounts “, State Capitol Austin, Texas 78711 Opinion No. M-92 Re: Whether the value of an indebtedness secured bymortgages against real estate located in Canadaand held by aresident decedent of this State should’be included in computing the amount of inheritance taxes due. Dear Mr. Calvert:

You have requested the above captioned question. We from your letter, .of request: opinion of this Office on the quote the following excerpt

‘!Wedesire the opinion of your office with respect to the inclusion of mortgages against real estate located in Canada for inheritance tax,purposes held byaresident of the State of Texas.

,I e 0 D dent [The Decedent7 died testate aresi1965,of Harris County, Texas, onNovember’g, andamongthe assets of his estate were mortgages on real estate located in Canada and payable in Canada in the amount of $22,581.00, These,mortgages were omitted from the State Inheritance TaxReturn by

.... the attorney for the estate, because he stated that Texas did not have jurisdiction under Texas Inheritance Tax Lawsover amortgage on real property situated in Canada, to which this Department does not agree.

“It has been the rule of the Department for manyyears to include for inheritance tax

-417-. .

Honorable Robert S. Calvert, page 2 (M-52)

purposes intangibles owned by a resident of the State of Texas regardless of whether such intangibles are located within or without the State of Texas. This rule also covered intangibles subject to foreign jurisdiction.

“Please advise this Department whether our rule is correct.” Amortgage is merely security for the payment of a debt0 39Tex.Jur.2d 12, Mortgages andTrust Deeds, Sec. 4, and authorities cited therein. Weare therefore rephrasing your question to read as follows:

“Whether the value of an indebtedness secured bymortgages against real estate located in Canada andheld by a resident decedent of this State should be included in computing the amount of inheritance taxes due.’ Article 14.01, Chapter 14, Title 122A, Taxation-General 20A, Vernon”s Civil Statutes, provides for the inheritance tax, in part, as follows:

“All property within the jurisdiction of this State,

..., regardless of whether such property is located within or without this State, ‘.., shall, upon passing to or for the use of any person, ..-# be subject to a tax *.=’
Theattorney for the estate has written us with regard to the matter under consideration, putting forth his contention that Article II(c) of the 

### 1961treaty between the United States and Canada 

### (13U.S.T. 

### 382),in providing that debts shall be deemed to be situated at the place where the debtor was ordinarily resident, would, in the instant case, preclude the State of Texas from including in the estate the indebtedness, and mortgage securing the payment thereof.

Article I.of such treaty, in part, provides as follows:

“1‘ The taxes referred to in this Convention are: (a) for the United States of America: the Federal estate tax; (b) for Canada; the est,ate tax imposed by t,heGovernment of Canada.”

-41%Honorable Robert S. Calvert, page 

### 3 (M-92)

Such limitation excludes from coverage by the treaty t,heinheritance tax levied by the State of Texas or any other tax levied byany state and, therefore, such treaty has no bearing upon any such tax.

ByOpinion No. 

### o-6122(1944), this Office upon aythorities cited therein, expressed the opinion that the legal ownership of int,angibles by one in Texas gives such intangibles a business situs in Texas andmakes them "property within the jurisdiction of this Stat,e." The inclusion of such int,angibles owned byTexas residents has been the administrative policy of the Comptrollerqs office since the date of such opinion andwe have no basis for overturning such opinion or the administrative policy in conformity therewith. Therefore, it is the opinion of this Office that the value of the indebtedness secured by the mort,gages should be included in the estate when computing the amount of inheritance taxes due. SUMMARY Thevalue of an indebtedness secured by mort.gages against real estate located in Canada andheld bya resident decedent of this State should be included in the estate when computing the amount of inheritance taxes due, Y&s very truly,

MMF:ms Prepared byMarietta McGregor Payne Assist-ant Attorney General APPROVED: OPINZONCOMMITTEE Hawthorne Phillips, Chairman W.V, Geppert, Co-Chairman Harold Kennedy Mario G, Obledo Louis Berry Robert Flowers STAFFLEGALASSISTANT: A, J. Carubbi, Jr, -419-