Opinion ID: 2486816
Heading Depth: 2
Heading Rank: 1

Heading: The Estate's tax liability

Text: ¶ 5. Following the Estate's tax payment on July 29, 2002, and a request by the Estate for Raymond and Ruth to cover all of the tax payment, Raymond filed a declaratory judgment action in the Chancery Court of DeSoto County to determine whether the administrator, Davis, could shift the tax burden of the Estate to Raymond and Ruth. The chancery court held that, once the assets of the estate were clearly determined, Raymond and Ruth should pay a percentage of the tax liability proportionate to their share of the gross estate. This Court reversed and remanded on January 20, 2005, holding that, under the applicable statutes, the estate should pay tax liability proportionate to its share of the taxable estate rather than the gross estate. Estate of Smith, 891 So.2d at 813. ¶ 6. This Court instructed the chancery court to determine the amount of the taxable estate on remand. See Estate of Smith, 891 So.2d at 813. Davis originally had included the farm as part of the estate, but after the reformation of the deed, the Estate held only a remainder interest in 493.7 [1] acres of that property. To determine the value of the remainder interest, the Estate and Raymond each hired appraisers. The Estate's appraiser found the remainder interest to be worth $340,000, while Raymond's appraiser valued the remainder interest at $245,000. In its March 10, 2009, opinion, the chancery court held that Raymond's appraisal was based on a more in-depth and accurate evaluation than the Estate's appraisal, and determined that, for tax purposes, the remainder interest was valued at $245,000.