Court Opinion

ID: 4623505
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:53:08.672242+00
Date Added: 2024-06-11T07:56:22.637705
License: Public Domain

ESTATE OF LAURA NELSON KIRKWOOD, DECEASED, IRWIN R. KIRKWOOD, EXECUTOR, JOHN E. WILSON, EXECUTOR OF ESTATE OF IRWIN R. KIRKWOOD, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Kirkwood v. CommissionerDocket No. 40845.United States Board of Tax Appeals23 B.T.A. 955; 1931 BTA LEXIS 1790; June 30, 1931, Promulgated *1790  1.  Decedent created a trust fund, the income from which was used for the purpose of maintaining the Nelson Memorial Chapel, wherein the decedent's remains and the remains of her immediate family were interred.  Held that such trust fund is not an allowable deduction in computing decedent's net estate under section 303(a)(3) of the Revenue Act of 1926.  2.  The value of a life estate given by decedent to her husband should be computed on the basis of his life expectancy at the time of decedent's death, rather than on the actual facts which subsequently developed.  3.  The inclusion by respondent of the value of decedent's homestead in her gross estate approved.  4.  additional income taxes paid by decedent's estate for taxes due for the period just prior to decedent's death constitute an allowable deduction in determining the value of decedent's net estate.  5.  In determining whether there has been a "transfer' within the meaning of the Federal taxing statutes imposing a tax on the transfer of a decedent's net estate, the state law in question is inapplicable.  Phil D. Morelock, Esq., for the petitioner.  Arthur Carnduff, Esq., for the respondent.  *1791  MORRIS *956  This proceeding is for the redetermination of a deficiency in estate tax proposed against the estate of Laura Nelson Kirkwood in the amount of $15,299.14, $14,297.84 of which amount is contested by petitioner.  The petition alleges that respondent erred in the following particulars: (a) The respondent has failed to allow as a deduction from the gross estate $105,000 provided in item 7 of the will of Mrs. Kirkwood for the purpose of maintaining the Nelson Memorial Chapel in Mt. Washington Cemetery.  (b) The respondent has determined the factor used for determining the value of the estate of the life beneficiary Irwin R. Kirkwood as .44935 and has computed tax on this fractional part of the estate after passing to the life beneficiary upon the death of Mrs. Kirkwood, whereas Mr. Kirkwood died during the year 1927 and enjoyed the benefits of the estate of Mrs. Kirkwood less than two years.  It is alleged that the factor to be used in determining the value of the estate of the life beneficiary in the estate of Mrs. Kirkwood should be based on actual facts as disclosed later rather than upon the theoretical basis of mortality tables.  (c) The respondent*1792  has erroneously reduced the amount of the property identified as previously taxed within the five-year period provided by law from $60,412.50 to $33,266.14.  (d) The value of Oak Hall, the residence of the deceased, which passed to her husband, Irwin R. Kirkwood upon her death, was by him relinquished to the city of Kansas City, in the amount of $250,000, has been erroneously included in the gross estate by the respondent.  (e) The respondent has failed to allow as a deduction against the gross estate $27,170.16 additional income tax paid as the result of changes in the income-tax return of Mrs. Kirkwood from January 1, 1926, to February 27, 1926.  (f) The respondent is in error in including as a part of the gross estate the part thereof passing to Irwin R. Kirkwood, inasmuch as under Missouri law the husband's part of the estate of the deceased wife vests at the time of marriage.  *957  FINDINGS OF FACT.  The petitioner is the executor of the estate of Irwin R. Kirkwood, the said Irwin R. Kirkwood having been, prior to his death, the executor of the estate of Laura Nelson Kirkwood.  For many years prior to his death, William Rockhill Nelson was the editor and publisher*1793  of the Kansas City Star. Said William Rockhill Nelson died April 13, 1915, and his will was probated in the Probate Court of Jackson County at Kansas City, Mo., February term, 1915.  It provided in part as follows: First: I give and devise my homestead, being Lot six (6), of Rockhill, an addition in and to Kansas City, Missouri, to my wife, Ida H. Nelson, for and during her life and after her death to my daughter, Laura Nelson Kirkwood, for life with full power to dispose of the same in fee simple.  Said real estate may be by my wife and daughter, or the survivor of them, sold and conveyed absolutely in fee simple at any time for such price as they, or the survivor of them, may think proper, but if said real estate is not conveyed by deed by my wife and daughter, or the survivor of them, or specifically devised by the last will and testament of the survivor of them, then said real estate shall after their deaths become and be a part of the trust estate hereinafter mentioned.  Second: I give and bequeath to my wife, all articles of household use and ornament, including furniture, rugs, statuary, pictures, books, works of art and silverware, and all jewelry and pleasure vehicles*1794  owned by me.  Third: I bequeath and devise all the rest, residue and remainder of my property, real, personal and mixed, of which I may die seized or possessed, or over which I may have testamentary control, or to which I may in any way be entitled at the time of my decease, of whatsoever the same may consist and wheresoever situate, to my wife, Ida. H. Nelson, and to my daughter, Laura Nelson Kirkwood, as trustees and to the successors of them and each of them in trust for the following purposes: * * * Upon the death of his wife and daughter or their failure or inability to continue to serve as trustees, Nelson designated "University Trustees" as their successors, and he specifically set forth the duties of such trustees, the manner of filling vacancies, the management of the trust corpus and the disposition of a portion thereof upon the death of his wife and daughter, and provided that the net income and rents from the remainder were to be "used and expended for the purchase of works and reproductions of works of the fine arts, such as paintings, engravings, sculpture, tapestries and rare books, the purpose being to procure in this manner works or reproductions of works of fine*1795  arts which will contribute to the delectation and enjoyment of the public generally, but are not usually provided for by public fund.  I direct that the university trustees in the purchase of such works of the fine arts shall select works or reproductions of the works of artists who have been dead at least thirty years at the time of the purchase of the same." *958  Ida H. Nelson died October 6, 1921, and her will was probated in the Probate Court of Jackson County at Kansas City, Mo., October 17, 1921.  Her will provided as follows: * * * Item 2: I give and bequeath to my daughter, Laura Nelson Kirkwood, all articles of household use and ornament, including furniture, rugs, statuary, pictures, books, bric-a-brac, works of art and silverware and all pleasure vehicles owned by me.  Item 3: I give and bequeath to my daughter, Laura Nelson Kirkwood, for the term of her life all sums due or owing to me at the time of my death by the trustees under the will of William Rockhill Nelson, and after her death the sum or sums so bequeathed or the investments therefrom shall become a part of my residuary estate and be used for the purposes thereof herein stated, and any portion thereof*1796  not required for said purpose shall be expended by the trustee herein named for the purchase of works and reproduction of works of the fine arts referred to in the will of William Rockhill Nelson.  * * * Item 13: All the rest, residue and remainder of my property, real, personal and mixed, of which I may die seized or possessed or over which I may have testamentary control or to which I may be entitled at the time of my death, of whatsoever the same may consist and wheresoever situate, I bequeath and devise to the New England National Bank, located at Kansas City, Missouri, as trustee and to its successor and successors in trust for the following uses and purposes: * * * Items 4 to 12, inclusive, covered specific bequests of cash.  The trust created by item 13 was for the purpose of "erecting a building in Kansas City, Missouri, to be used for art purposes and to bear the name of William Rockhill Nelson followed by the words Gallery of Art or other suitable words." Laura Nelson Kirkwood, whose estate is the petitioner herein, died February 27, 1926, and her will was probated in the Probate Court of Jackson County at Kansas City, Mo., March 3, 1926.  Her will provided in part*1797  as follows: * * * ITEM II I direct that my remains be placed and interred in the Nelson Memorial Chapel in Mount Washington Cemetery hereinafter mentioned.  ITEM III I give and bequeath the portrait of my father, William Rockhill Nelson, deceased, which is included in my possession in my residence, known as "Oak Hall," the homestead of my father at the time of his death, to the University Trustees, to be appointed under and pursuant to the provisions of the Last Will and Testament of my father, to be placed with and made a part of the collection of works and reproductions of the works of fine arts, to be acquired by such trustees under said Will.  * * * *959  ITEM V In the event my husband, Irwin R. Kirkwood, shall not survive my death, I direct my executor to have the furnishings, ornaments and other contents of my said residence viewed by at least two experts for the purpose of determining and selecting therefrom all works and reproductions of works of the fine arts.  Such selections shall be tendered by my executor to the University Trustees aforesaid as a gift by me to be added to the collection of works and reproductions of works of fine arts to be acquired*1798  under my father's will as aforesaid.  In the event such gift shall not be accepted for the purpose by said University Trustees then such selections shall be treated and disposed of as a part of my residuary estate as hereinafter provided, in Item IX.  * * * ITEM VII I give, devise and bequeath to Fred C. Vincent, Earl McCollum, John E. Wilson and New England National Bank and Trust Company in Kansas City, and their successors to be named as hereinafter provided, in continued trust: (1) The sum of One Hundred and Five Thousand Dollars ($105,000.00); and (2) Lot One (1) in Block Twelve (12) in Mount Washington Cemetery, as said lot is marked, designated and described on the sub-division or plat of a part of the Northwest Quarter (1/4) of Section Five (5) Township Forty-nine (49) Range Thirty-two (32), known as "Lot 1, Block 12, Mount Washington," said plat being on file in the office of the Recorder of Deeds of Jackson County.  Missouri, at Independence, with the Memorial Chapel, known as the Nelson Memorial Chapel, thereon, together with all rights, privileges and appurtenances thereunto pertaining or belonging to me in connection therewith for the following uses and upon*1799  the conditions following to-wit: (a) In addition to the remains of my father, William Rockhill Nelson, and my mother, Ida H. Nelson, now in the said Chapel, my remains and the remains of my husband, Irwin R. Kirkwood, shall be placed and kept therein.  (b) No other remains or interments than those specified shall ever be placed or made in said Chapel or in or upon the said lot.  (2) The said trustees shall invest and reinvest the trust fund as they deem to be the best interest of the trust, and after paying all expenses of the trust, including one hundred and fifty dollars ($150.00) per annum to each of the Trustees, shall out of the income and returns from the trust estate and with so much of the principal sum as they may consider necessary, pay: First, the sum of two hundred and fifty dollars ($250) per annum for the purpose of supplying and beautifying the interior of the Chapel with flowers and particularly on March 7th and 18th and November 29th of each year, and next the expense and cost of maintaining, protecting, caring for and keeping in condition the said lot and Chapel and its contents, renewing and rebuilding, when necessary, said Chapel, and constructing and maintaining, *1800  when deemed necessary, the roadways giving access to and about said lot, and to fencing, beautifying or making of other improvements deemed advisable by the trustees, so far and so long as such trust fund shall suffice and exist.  In the event and when and as any trustee aforesaid or his successor, shall die, or cease for any reason to act, or if any of the above mentioned trustees, or his successor, shall fail, for any reason, to qualify as such, a successor to serve as trustee in his place and stead shall be named and appointed by the remaining trustees or trustee.  *960  In the event the trust shall for any reason fail or cease then the trust fund remaining shall be treated and pass as a part of my residuary estate as hereinafter provided in Item IX.  ITEM VIII Under and pursuant to the provisions of the Last Will and Testament of my father, William Rockhill Nelson, now deceased, I am invested with the power to specifically devise by my Last Will and Testament the property, which was described in my father's said Last Will and Testament as his homestead, being Block Six (6), Amended Plat of Rockhill, an Addition in and to Kansas City, Missouri, and I now, pursuant*1801  to the right and power vested in me, specifically give and devise said property, viz: Block Six (6), Amended Plat of Rockhill, an Addition in and to Kansas City, Missouri, to my said Husband, Irwin R. Kirkwood, if he shall survive my death, for and during his life, with full power to sell and convey the same, after first, however, causing the residence, "Oak Hall", to be razed, and in the event of such sale the proceeds thereof shall be treated and disposed of as a part of my residuary estate as provided in Item IX hereof.  Upon my said husband's death, if said property shall not have been sold by him, it shall pass to the trustees and become a part of the trust estate as specified in Item IX hereof.  ITEM IX I give, devise and bequeath all of the rest, residue and remainder of the property and estate, real, personal and mixed, wheresoever situate, which I may own or be in any manner entitled to, in law or in equity, whether in possession or expectancy, at the time of my death, to my said husband, Irwin R. Kirkwood, if he shall survive my death, in trust for the following uses and purposes and upon the conditions following, to-wit: My said Trustee shall have full power to sell*1802  at public or private sale, lease, dedicate and dispose of such trust estate or any portion thereof for such price and upon such terms and conditions as he shall see fit and to that end may execute all necessary contracts of sale, conveyances, leases or other instruments, and to invest and reinvest all funds realized from the sale of any property belonging to the estate in such property or securities and in such manner as he may deem prudent.  He shall, out of the rents and income from the estate, pay all expenses of maintaining the properties of the estate and the insurance, taxes, assessments, cost of repairs and any and all other expenses connected therewith.  The rents, returns and income from the trust estate after the payment of costs and expenses aforesaid shall go and belong to my said husband in his individual right.  My said trustee shall have full right, power and authority to sell and convert into cash any and all of the said trust estate at any time and contribute and pay over the same in such amounts and under such conditions as he may see fit toward providing a site for or the cost of construction of a building in Kansas City, Missouri, to bear the name of William*1803  Rockhill Nelson, followed by the words "Gallery of Art" or other suitable words, to be used for the purpose of housing and caring for pictures, paintings, sculpture, rare books, tapestries and works of the fine arts to be purchased pursuant to the provisions of the said Last Will of my deceased father, William Rockhill Nelson.  My said trustee is authorized and empowered to use any remaining funds to acquire and purchase such pictures, paintings and works of art *961  as may be approved of by at least two (2) experts to be designated by him to be added to and to become a part of the collection aforesaid and housed in the said building so to be erected.  Upon the death of my said trustee all of the trust estate then remaining shall go to and vest in the persons hereinafter named as trustees, to be held, managed and disposed of as hereinafter provided.  If my husband, Irwin R. Kirkwood, shall not survive my death, then, said Block Six (6), Amended Plat of Rockhill, and all the rest, residue and remainder of the property and estate, real, personal, and mixed, wheresoever situate, which I may own or be in any manner entitled to, in law or in equity, whether in possession or expectancy, *1804  at the time of my death, shall go to and vest in Fred C. Vincent, John E. Wilson and New England National Bank and Trust Company in Kansas City, or the survivors or survivor at the time of them, in trust; or, in the event my said husband shall survive me and shall assume the duties of the trust as aforesaid all of the trust estate remaining at the time of his death, together with said Block Six (6), Amended Plat of Rockhill or such part thereof as he shall not have sold or disposed of, shall go to and vest in said Fred C. Vincent, John E. Wilson and New England National Bank and Trust Company in Kansas City, or the survivors or survivor at that time of them, in trust, for the following uses and purposes and upon the conditions following, to-wit: All of the furnishings, ornaments and other contents of the said residence "Oak Hall" not sold under the conditions hereinbefore mentioned by my executor, shall be sold by said trustees, (which term shall include the survivors or survivor of them) to or through dealers, merchants or persons, strangers to me, doing business or living more than Two Hundred Fifty (250) miles from Kansas City, Missouri, and the sum or sums realized therefrom shall*1805  be placed in the trust estate; and said residence "Oak Hall" shall be forthwith razed by said trustees.  At any time there may be idle funds belonging to the trust estate the trustees shall have the right to invest the same in bonds of the United States or general obligation bonds of the State of Missouri, State of Kansas or of Kansas City, Missouri, the interest and income therefrom to become and be a part of the trust estate.  Said trustees shall manage and control the trust estate and may convert the same into cash in such manner as they deem proper, and to that end they shall have full right and power to sell and convey the same and to execute any and all deeds, conveyances and other instruments that may be necessary, and expend so much of said trust fund as they shall deem proper, first, to the payment of costs, charges and expenses of the trust estate and the properties a part thereof, and, next, toward providing a site for or construction of a building in Kansas City, Missouri, to bear the name of William Rockhill Nelson, followed by the words, "Gallery of Art" or other suitable words, to be used for the purpose of housing and caring for pictures, paintings, sculpture, rare*1806  books, tapestries, and works of the fine arts to be purchased pursuant to the provisions of the said Last Will of my deceased father, William Rockhill Nelson, and any funds not so expended for a site for or the construction of a building as aforesaid shall be used and expended by the trustees for pictures, paintings and works of art, to be approved by at least two (2) experts to be designated by them, to be added to and to become a part of the collection aforesaid and housed in the said building so to be erected.  I appoint my said husband, Irwin R. Kirkwood, if he shall survive my death, or John E. Wilson, if my said husband shall not survive my death, as *962  executor of this, my Last Will and Testament, and request that such executor be allowed to serve without bond and that he be not required to file an inventory or appraisement of any portion of my estate.  * * * The Nelson Memorial Chapel referred to in item seven of the decedent's will was erected in Mount Washington Cemetery during her lifetime.  The chapel is a very costly and ornate structure of granite and marble, located on an elevation with flights of steps leading up to it.  The entrance opens into a reception*1807  space in the building which affords accommodations to visitors, spectators, and members of the public who come there and pay their respects or attend the burials.  On a level lower than the entrance room is the space in which the caskets, containing the remains of the Nelsons and the Kirkwoods, are located.  The only funds available for the upkeep of the chapel and grounds are the funds placed in trust under the will of Laura Nelson Kirkwood.  In maintaining the chapel and in administering the trust fund providing for such maintenance, the trustees have kept the grounds and grass cut, the trees trimmed and in good order, the building repaired, and made renewals in various portions of the structure.  A caretaker is employed who at all times looks after the tract, places flowers in the chapel, and attends to visits by members of the public.  These visits are encouraged by the trustees as many people in and about Kansas City feel that William Rockhill Nelson was possibly the greatest man that Kansas City ever had, and the chapel, wherein his remains and the remains of his immediate family are interred, is considered a sort of shrine to his memory.  Flowers are often placed in the chapel*1808  by persons unknown to the trustees.  In 1929 the Memorial Day service by the American Legion Post, which was quite a public function, was held in the chapel.  "Oak Hall," the homestead of William Rockhill Nelson, referred to in the first paragraph of his will, was a tract of land of approximately twenty-two acres improved by a large stone residence and other appurtenances.  Originally the stone dwelling was of moderate size, but from time to time Nelson had torn away portions of the building in order to make large additions thereto, which resulted in any number of wings.  The decedent, Laura Nelson Kirkwood, employed architects to determine the value of the grounds and building for an art center.  The building was found to be impractical for use as an art gallery, and it was necessary to locate the site for a new building.  Prior to her death Laura Nelson Kirkwood had established the location of the art gallery on the tract to her own satisfaction.  The homestead "Oak Hall" was not disposed of by either Ida H. Nelson nor Laura Nelson Kirkwood during their respective lives except as set forth in their respective wills.  *963  Under date of January 28, 1927, Irwin R. Kirkwood*1809  conveyed "Oak Hall" by deed to Kansas City, Mo.  This conveyance was formally accepted by the municipality of Kansas City by ordinance.  After Mr. Kirkwood's death the building was razed as promptly as possible and the plans for the art gallery provided for under Mrs. Nelson's will were enlarged to include the larger bequests.  Irwin R. Kirkwood died August 29, 1927, or one year, six months, and two days after the death of his late wife, Laura Nelson Kirkwood, the decedent herein.  At some time after August 1, 1926, after the purchase of the Kansas City Star, insurance of something over $600,000 was taken out upon his life, the greater portion being for the benefit of the said Kansas City Star and a smaller portion for his personal estate.  There was some difficulty in consummating these policies, resulting finally in the insurance company advancing his age by five years, that is, he was actually 48 years of age and his age was advanced for insurance purposes to 53.  Under the will of Laura Nelson Kirkwood, her husband, Irwin R. Kirkwood was given a certain life tenancy.  The respondent, according to tables of mortality and expectancy, has computed the value of said life*1810  estate passing to Irwin R. Kirkwood by multiplying the value of the net estate as determined by the respondent by .55065.  In the net estate is included by the respondent the $105,000 provided in Item VII of the will of Mrs. Kirkwood for the benefit, maintenance and suitable upkeep of the Nelson Memoraial Chapel at Mount Washington Cemetery, and the value fixed by the respondent on "Oak Hall," being block six (6), amended plat of Rockhill, an addition in and to Kansas City, Mo., which was $250,000, and he reduced the value of the contents thereof of property previously taxed within five years from $60,412.50 to $33,266.14.  Under date of June 4, 1928, the executor of the estate of Laura Nelson Kirkwood paid on behalf of said estate additional income taxes to the collector of internal revenue for the sixth district of Missouri in the sum of $25,406.01, and interest of $1,764.15, a total of $27,170.16.  The additional income tax was for the period from January 1, 1926, to date of Mrs. Kirkwood's death February 27, 1926.  Respondent has not allowed said payment of income tax as a deduction from the gross estate, but did allow as a deduction the amount of Federal income tax as originally*1811  returned and paid by the estate, to wit, $3,166.53.  OPINION.  MORRIS: The first issue presented by the pleadings is whether the $105,000 trust fund established under the will of Laura Nelson Kirkwood constitutes an allowable deduction from her gross estate.  The *964  deductibility of this trust fund depends upon the interpretation of section 303(a)(3) of the Revenue Act of 1926, which provides as follows: SEC. 303.  For the purpose of the tax the value of the net estate shall be determined - (a) In the case of a resident, by deducting from the value of the gross estate - * * * (3) The amount of all bequests, legacies, devises, or transfers, to or for the use of the United States, any State, Territory, any political subdivision thereof, or the District of Columbia, for exclusively public purposes, or to or for the use of any corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual, or to a trustee or trustees,*1812  or a fraternal society, order or association operating under the lodge system, but only if such contributions or gifts are to be used by such trustee or trustees, or by such fraternal society, order, or association, exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.  The amount of the deduction under this paragraph for any transfer shall not exceed the value of the transferred property required to be included in the gross estate.  [Italics supplied.] By Item VII of her will Laura Nelson Kirkwood devised in continued trust to named trustees the Nelson Memorial Chapel in Mount Washington Cemetery and the sum of $105,000 for the upkeep and maintenance of the chapel and grounds.  Since the devise was to trustees it would appear that petitioner should be governed by that portion of the above quoted section which refers to bequests, legacies, devises, or transfers "to a trustee or trustees." Petitioner, however, contends that, because of William Rockhill Nelson's charities and the esteem in which he was held by his fellow men, his place of burial is a sort of shrine where the public pays homage*1813  to his memory.  It is asserted that the shrines of great men are a moral inspiration to the people as a whole, that they are of great literary and educational value; therefore, the petitioner argues that since this chapel is for the use of the people of the State as a whole, it is for the use of the State, because in a broad sense the people of the State constitute the body politic, and that since this bequest was for the use of the State, it is deductible under section 303(a)(3) of the 1926 Act.  The weakness of this argument lies in the fact that the trust fund was created for purely personal reasons, namely, the care and maintenance of the last resting place of the decedent and her immediate family.  The State, nor indeed the people therein, had no interest in the trust fund, nor did it or they have any voice in or control *965  over the chapel or the activities of the trustees.  The public visited the chapel, and even though such visits were encouraged, we are satisfied that the trustees, in the exercise of their discretion, could have excluded the public therefrom at any time.  We can not agree with the petitioner's contention, therefore, that the chapel was maintained*1814  under the trust, exclusively for public purposes; rather, we believe that it was the personal wishes of the decedent which were being carried out by the trustees.  If in the course of performing the duties imposed by the trust instrument, the public was directly or indirectly benefited, we can not see how this benefit in any way changed the character of the trust or the uses for which it was created.  It is our opinion, therefore, that the $105,000 trust fund is not a proper deduction within the meaning of section 303(a)(3) of the Revenue Act of 1926.  Petitioner cites in support of his contention the decision of the court in , wherein it was held that the cost of a mausoleum was deductible from the decedent's gross estate.  In that case the deduction was allowed upon the ground that the cost of the mausoleum was a part of the "reasonable interment expenses." No such question is raised in the present proceeding and the cases are, therefore, distinguishable.  The decedent by item nine of her will gave her residuary estate to her husband in trust, and at the same time made him the sole beneficiary of the income from the trust*1815  estate.  She provided that upon the death of her husband the remainder of the trust estate should vest in three designated trustees who were to use the trust estate to provide a site for or construct a building in Kansas City, Mo., to bear the name of William Rockhill Nelson followed by the words "Gallery of Art," which said building was to be used to house and care for works of the find arts which were to be purchased under the last will and testament of her father.  The trustees were to use any excess of the trust fund for the purchase of additional works of the fine arts.  Her husband, as trustee, was given full power and authority during his lifetime to use any and all of the trust estate for the same purposes.  Concededly, under the provisions of decedent's will her husband received a life tenancy in her residuary estate, and we are satisfied that the remainder of the residuary estate after his death was given in trust for "charitable, scientific, literary or educational purposes." This brings us to the second issue, namely, whether respondent erred in using the factor .55065 to determine the value of Irwin R. Kirkwood's interest in the estate of his wife, when the facts show*1816  that he died within one year, six months, and two days of the decedent.  In other words, we are asked to hold that Kirkwood's *966  actual life should control the valuation of his life estate, rather than his estimated life as shown by well known tables of mortality.  In our opinion a lengthy discussion of this issue would serve no useful purpose, in view of the opinion of Mr. Justice Holmes in . In that case one Edwin C. Stewart died testate appointing his wife and the Ithaca Trust Company, executors, and the Ithaca Trust Company, trustee, of the trust created by his will.  He gave the residue of his estate to his wife for life, and after her death there were bequests in trust for admitted charities.  The wife died six months after the decedent.  The opinion of Mr. Justice Holmes in part is as follows: * * * The question is whether the amount of the diminution, that is, the length of the postponement, is to be determined by the event as it turned out, of the widow's death within six months, or by mortality tables showing the probabilities as they stood on the day when the testator died.  The first impression*1817  is that it is absurd to resort to statistical probabilities when you know the fact.  But this is due to inaccurate thinking.  The estate so far as may be is settled as of the date of the testator's death.  See . The tax is on the act of the testator not on the receipt of property by the legatees. ;  and passim; ; . Therefore the value of the thing to be taxed must be estimated as of the time when the act is done.  But the value of property at a given time depends upon the relative intensity of the social desire for it at that time, expressed in the money that it would bring in the market.  See . Like all values, as the word is used by the law, it depends largely on more or less certain prophecies of the future; and the value is no less real at that time if later the prophecy turns out false than*1818  when it comes out true.  See . . Tempting as it is to correct uncertain probabilities by the now certain fact, we are of opinion that it cannot be done, but that the value of the wife's life interest must be estimated by the mortuary tables.  * * * The above quoted portion of the Supreme Court's decision is, in our opinion, determinative as to this issue.  We hold, therefore, that the value of Irwin R. Kirkwood's life interest in his wife's estate should be determined upon the basis of his theoretical life as estimated by mortuary tables rather than on the facts as they subsequently occurred.  The third issue is whether respondent erred in determining the deduction under section 303(a)(2) for property previously taxed to another estate within a period of five years.  Petitioner assets that he is entitled to deduct the full value of the contents of "Oak Hall," having a stipulated value of $60,412.50, instead of $33,266.14 as allowed by respondent, which figure is the product of $60,412.50 X .55065.  By item two of the will of William Rockhill Nelson his*1819 *967  wife received "all articles of household use and ornament, including furniture, rugs, statutory, pictures, books, works of art and silverware, and all jewelry and pleasure vehicles" owned by Nelson.  Ida H. Nelson, by item two of her will, used practically the same language in giving the property to her daughter, Laura Nelson Kirkwood, adding the term "bric-a-brac" and omitting the term "jewelry." Mrs. Nelson died October 6, 1921, and her daughter died February 27, 1926, or less than five years after her mother.  We are satisfied from the above facts that the contents of "Oak Hall" passed under and pursuant to the second paragraph of the will of Mrs. Nelson, and were taxed as a part of her net estate less than five years prior to the death of Laura Nelson Kirkwood.  Section 303(a)(2) of the Revenue Act of 1926 provides that for the purpose of the tax the value of the net estate of the decedent shall be determined by deducting from the gross estate: (2) An amount equal to the value of any property (A) forming a part of the gross estate situated in the United States of any person who died within five years prior to the death of the decedent, or (B) transferred to the*1820  decedent by gift within five years prior to his death, where such property can be identified as having been received by the decedent from such donor by gift or from such prior decedent by gift, bequest, devise, or inheritance, or which can be identified as having been acquired in exchange for property so received.  This deduction shall be allowed only where a gift tax imposed under the Revenue Act of 1924, or an estate tax imposed under this or any prior Act of Congress was paid by or on behalf of the donor or the estate of such prior decedent as the case may be, and only in the amount of the value placed by the Commissioner on such property in determining the value of the gift or the gross estate of such prior decedent, and only to the extent that the value of such property is included in the decedent's gross estate and not deducted under paragraph (1) or (3) of this subdivision.  The only difference between the parties is on the amount of the deduction under the above quoted provision.  The respondent contends that the value deductible under the above provision is $33,266.14, the value of the life estate in the decedent's husband, as the balance thereof was deducted under paragraph*1821  3 of the above subdivision, and if $60,412.50 were deducted as property previously taxed, the estate would get a deduction of $87,558.86.  The statute specifically provides for the deduction of the value of property previously taxed within five years in the amount of the value placed by the Commissioner on such property in determining the value of the gross estate of such prior decedent, but only to the extent that the value of such property is included in the decedent's gross estate and not deducted under paragraph (1) or (3) of the subdivision.  The deduction for the value of the contents of "Oak Hall," therefore, should be allowed to the extent of the value thereof included in the prior decedent's estate and in the present decedent's *968  gross estate, reduced by the value of such property deducted under section 303(a)(3).  The next issue relates to the inclusion in decedent's gross estate of $250,000, the stipulated value of the homestead, "Oak Hall," exclusive of the contents thereof.  Petitioner contends that as Irwin R. Kirkwood relinquished the property by deed to the municipality of Kansas City on January 28, 1927, less than one year after decedent's death, and*1822  that as he died approximately a year and a half after the decedent, that the factor .55065 used by respondent was excessive.  Under William Rockhill Nelson's will the homestead "Oak Hall" realty, as distinguished from personalty, was given to Ida H. Nelson for life, and upon her death to Laura Nelson Kirkwood for life with full power to dispose of same in fee simple.  Upon the death of her mother Laura Nelson Kirkwood received the realty from her father with full power to convey the fee simple title thereto, and at this point it should be noted that Ida H. Nelson made no mention of the homestead in her will.  The decedent's will gave a life tenancy in "Oak Hall" to her husband, together with a power to sell and convey the same, in which event the proceeds thereof were to be included in her residuary estate.  As the husband was also given a life tenancy in decedent's residuary estate, it is obvious that Kirkwood had a life tenancy in the homestead.  Since the homestead passed under decedent's will, and was not a part of a prior taxed estate, the respondent correctly included the stipulated value thereof in decedent's gross estate.  The fifth issue relates to the deductibility of*1823  additional income taxes paid by the estate under date of June 4, 1928, for the period January 1, 1926, to February 27, 1926, the date of decedent's death.  This payment by the estate amounted to $27,170.16, $25,406.01 thereof being the principal amount of said income taxes, and $1,764.15 thereof being interest.  Originally the estate had returned and paid income taxes of $3,166.53, which amount respondent allowed as a deduction from decedent's gross estate.  Petitioner contends that under these facts he is entitled to deduct the additional income taxes from the said gross estate.  This issue has been before the Board in two prior cases, in both of which we held that income taxes for a period prior to the decedent's death were allowable deductions in determining the value of decedent's net estate.  , and , modified in other particulars at . Since the opinions in these cases support the petitioner's contention, our decision as to this issue is for the petitioner. *1824 The sixth and final issue is whether respondent erred in including as a part of decedent's gross estate, the part thereof passing to Irwin *969  R. Kirkwood, since under the laws of the State of Missouri the husband's part of his wife's estate vests at the time of marriage.  Petitioner cites in support of the proposition that that part of decedent's estate passing to Kirkwood should be execluded under Missouri law, the decisions of the Federal District Court in , and . The decisions in those cases support petitioner's contention, but in  (certiorari denied, ), the District Court was reversed, and the Circuit Court of Appeals, after an exhaustive examination of the decisions of the United States Supreme Court and the leading case by the Missouri Supreme Court - , held that the state law was inapplicable, and that there was a transfer within the meaning of the Federal taxing statute.  Accordingly, we hold the respondent as to this issue. *1825 Decision will be entered under Rule 50.