The New York herald., 1921-07-01
Taxability of Famous Pen
sion Trust Is Solved by
Splitting Liability.
PICTURES WORTH S48,+32
Fifth Ave. Home Furniture
$21,984, Jewelry $4,000 and
Clothing Only 81, 500.

State Transfer Tax Appraiser, filed
yesterday. He found total assets OF
S25.933,014.1 Deductions of s3.7S2.-
enS.05 for debts. administration and
mineral expenses left a net estate OF
$22 ,011.05, but to this was added
the S4,643,750 trust deed to the Hons
Trust Company of Hoboken, executor
of the estate. which provides additional
life income to the widow and a legacy
for their daughter.
Not only was the appraisal one OF
unusual difficulty due to the question
Of the taxability of three items in
volving several million dollars each
but Mr.. Compton found it necessary to
take the testimony of witnesses re-
garding the manner in which expert
appraisers had been retained to place
valuations on real and personal prop
erty
Mr.. Compton's investigation disclosed
an 'irregularity' in the appraising that,
according to the witnesses, has been
customary since the appraisal of the
estate of j. Pierpont Morgan, namely
the hiring of the same appraiser by both
the State Comptrolers office. which
seeks to find as many taxable assets as
possible, and by the executors of the
estate, who seek as few as possible.
"Since no attempt by either party to
obtain an unreasonable or unfair ex-
: pert opinion regarding the value of any
of these assets in this estate is ap-
parent" his appraisal declares, "I accept
and shall report TO the Surrogate the
affidavits OF expert appraisal submitted
herein, but which fail to conform to the
usual procedure The afrdavits of ex-
pert opinion should be required here
after / believe. to include statement
TO the effect that the affiant was en-
ployed exclusively by one of the parties
and that the valuations fixed in his
affidavit OF appraisal reflect his own in
dependent judgment"
state saves Experts Fees.
In the usual procedure Of appraising
estates, the testimony showed. the ex-
ecutors submit an appraisal, which the
State Comptroller's Office examines and
either approves or submits counter ap-
prafsal II a counter appraisal Is not
thought necessary the state thereby
saves much in experts fees.
The filing OF this report was the last
official act of Mr.. Compton, as he re-
signed yesterday to resume law prac-
tice in the firm of Peaslee & Compton,
sol Fifth avenue
An interesting legal question which
in similar case is now before the Court
of Appeals was decided by Mr.. Compton
against the State Comptroller's office.
This regarded the taxability of the Car
negie home at Fifth avenue and Ninety
first street. appraised at S977,SS3. The
transfer tax appraiser held that mas
much as the property was held by Mr..
and Mrs. Carnegie Jointly as tenants in
entirety 1t is not subject to taxation.
point meaning much more in taxes
to the State was decided In the Comp
troller's favor when Mr.. Compton ruled
that Federal estate tax OF s3,075. .037.50
could not be claimed as deduction
from the taxable assets under New York
laws. although such deductions are al
lowed In other states. IL Is expected.
though. that the executors will carry
this question to the Court of Appeals.
The famous pension fund Mr.. Car
negie established in 1901 and subse-
quently embellished until it's principal
consisted of s4,250.000 par value United
States Steel Corporation bonds was split
by Mr.. Compton as to it's taxabilty. He
agreed. as contended In affidavits by Mr..
Root and Mrs. Carnegie. that the steel
man intended this as a permanent char
ity. BY resorting to actuares' figures
as TO the probable lives OF the 406 bene-
ficiaries and the total sums they would
receive, 1,348.043 is set aside as a
charity and not taxable, but the $2,901,-
eb7 balance may be taxed.
Because of the law which prevents a
man leaving a family from giving more
than half his estate to charity the Car
negie Corporation gets only s10.663. $50,
which is several millions less than the
amount Mr.. Carnegie intended TO leave
Il. But he took cognizance Of the law In
his will by making his wife residuary
iegatee and intimating that she eventual
Iy turn over to the corporation the money
he was prevented from leaving to t.
Trust Fund for Daughter.
Mrs. Louise whitfield Carnegie. the
widow. receives a total Of $11.33s,S47.
Their daughter. Mrs. Margaret Carnegie
Miller, receives nothing under the will.
but In provided for In the 81 100000 trust
deed considered part Of the estate. Most
OF the deductions allowed against the
estate represents debts, totalling $3.02S,-
7ss.45. Then there Is s750,000 for ad-
ministration expenses, OF which S450, 900
represents counsel fees 100000 office
expenses and disbursements. and $780,
900 the commission allowed the executor
under the Will Funeral expenses OF
s3.264.60 also are deducted.
Mr. Carnegie's total assets were di-
vided as follows: Real estate. $1,000
933 cash. s583, 1868; household furni-
ture, notes bonds. mortgages and claims
due s3.706.e4t.6 60: securities, st7,543,-
5Ss.57. partnership interests, S25,406.62
other property not included In the fore
going, s2.S72.74743.
Unlike many other wealthy men, Mr.
Carnegie was not patron Of art NOT
was his home deliberately furnished. The
appraisal shows his general house fur
nishings In the Fifth avenue mansion
we're worth only 2t9S4 and pictures
there were worth only s4S.432 He had
only $4,000 worth of jewelry and less
than s1.500 worth OF clothes
His liking for books is shown In that
he had s2e 900 worth in his Scotch resi-.
dence, Skibo Castle. and $1,000 worth
In his Fifth avenue home. Although Il
forms no part OF the American estate
Mr. Root submitted an affidavit setting
forth the value Of skibo Cnstle as $685.
1f0.