Court Opinion

ID: 4473016
Source: CourtListenerOpinion
Date Created: 2020-01-14 19:35:02.650281+00
Date Added: 2024-06-11T15:04:15.686010
License: Public Domain

TURNER, J., dissenting: I am unable to agree with the conclusion that any part of the estate of Paul Loughridge was included in the gross estate of Fred H. Harmon for Federal estate tax purposes. It is true that the respondent determined a deficiency against the estate of Fred H. Harmon by including as a part of the taxable gross estate the full value of the Fred Harmon trust corpus. The estate filed a petition with this Court, contesting the inclusion of the corpus of that trust, both with respect to the Loughridge half and the Mclllvaine half. In advance, however, of the date set for the trial of the proceeding in the Tax Court, representatives of the Harmon estate and of the respondent met in conference to consider possible stipulation of facts or settlement of all the questions of liability of the Harmon estate for the deficiency determined. After reaching an understanding as to the part of the trust corpus which had been contributed by Fred Harmon after March 3, 1931, and some discussion and agreement with respect to state inheritance tax paid, the conference turned its attention to the remaining corpus of the Harmon trust, consisting of the Mclllvaine half and the Loughridge half. At the outset, the representatives of the respondent conceded that no part of the property representing the Loughridge half was includible in the taxable gross estate of Fred H. Harmon, and, by reason of that concession, any question of the inclusion of such part of the Harmon trust corpus in the taxable gross estate of Fred Harmon was eliminated. The representatives of the respondent advised the representatives of the Harmon estate that they could not concede that the Mclllvaine half of the trust did not properly constitute a part of the taxable gross estate, and all discussion thereafter turned to the merits of that proposition. The representatives of the respondent advised the representatives of the Harmon estate that the deficiency in tax remaining after the elimination of the Loughridge part of the trust corpus had been computed and found to be $27,351.59. The representatives of the Harmon estate made no definite proposal as to settlement of the estate tax liability remaining after such elimination of the Loughridge half of the trust corpus from the taxable gross estate, but indicated that a proposal might be made later. About a week or ten days after the conference, a representative of the estate who had participated in the conference telephoned one of the respondent’s representatives and advised him of a willingness to settle for one-half of the deficiency of $27,351.59, which would be due if the Mclllvaine half of the trust corpus remained in the taxable gross estate. Representatives of the respondent, after consideration, accepted the proposal and the deficiency of $13,675.70, representing one-half of the total deficiency attributable to the inclusion in the taxable gross estate of Fred H. Harmon of the Mclllvaine half of the trust corpus, was agreed upon and the decision of the Tax Court was entered pursuant thereto. On such facts, it may not correctly be said that any part of the Paul Loughridge estate constituted prior taxed property of the estate of Fred H. Harmon. The facts above set forth definitely appear from the testimony of Luther Craft, technical staff representative of the respondent, who, with Harold H. Hart, represented the respondent at the conference with the representatives of the Fred H. Harmon estate, as above set forth. Craft’s testimony setting forth the above facts is at no place contradicted by the testimony of any witness appearing in the instant proceeding. In such situation, I respectfully note my dissent from the conclusion of the majority of the Court that part of the estate of Paul Loughridge constituted property previously taxed for Federal estate tax purposes as a part of the estate of Fred H. Harmon.