Court Opinion

ID: 5401640
Source: CourtListenerOpinion
Date Created: 2022-01-08 10:44:37.569911+00
Date Added: 2024-06-11T08:30:27.563276
License: Public Domain

Cox, J.
(dissenting in part). I concur in the majority opinion except insofar as it adopts the findings of the Referee in connection with the formula to be used in apportioning the Federal estate tax and the tax interest. As of the date of death of the *800settlor, the trust assets had a total value of $1,815,700.94. The settlor was a nonresident and, under the tax compromise agreed upon herein, the United States Treasury bonds in the sum of $228,487.40 were considered nontaxable. Thus, the gross taxable estate was $1,587,213.54. The gross administration expenses, as sanctioned by the tax authorities, totalled $73,815.15. Of this amount, $64,534.12, being the portion of the administration expenses allocable to the taxable assets, was allowed as a deduction. The balance of $9,281.03, the amount allocable to the nontaxable assets, was not allowed as a deduction. Thus, the trust assets subject to Federal estate tax under the terms of the tax compromise had a value of $1,522,679.42. The Referee determined the formula to be: the value of the annuity as the numerator of the fraction and, for the denominator, he deducted from the gross estate the total administration expenses of $73,815.15. However, he included the nontaxable treasury bond in the sum of $228,487.40; the denominator of his fraction thus became $1,741,-885.79. This formula does not comply with section 124 of the Decedent Estate Law. The correct formula should be the value of the annuity as the numerator and the net taxable estate amounting to $1,522,679.42 as the denominator. The court stated in Matter of Kaufman (170 Misc. 436, 445): “ The court is bound by the actual fact of inclusion or exclusion of property by the taxing authorities. * * * The court is not a reviewing body. It may not say that something else should have been done by the taxing authorities that in fact was done. It takes the accomplished fact of taxation and then allocates the burden on the basis of actuality of tax.” The Referee’s determination disregards the actuality of the tax imposed upon the trust estate.
The Referee used the same formula as above in determining the tax interest to be paid by the annuitant. His determination on this point should be modified.
I dissent in reference to the allocable tax and the interest thereon and vote to modify the Referee’s report in accordance herewith.
Peck, P. J., Cohn and Rabin, JJ., concur with Botein, J.; Cox, J., dissents in part in opinion.
Order of September 22, 1954, modified to conform with the opinion herein and otherwise affirmed. Settle order on notice. Order of the Official Referee, dated March 3, 1955, modified in accordance with the opinion herein and, as so modified, affirmed. Settle order on notice.