Court Opinion

ID: 3581810
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:32:51.253267+00
Date Added: 2024-06-11T13:54:49.241924
License: Public Domain

The tax is based upon the present value of the leasehold interest. Upon a sale of this interest to-day the purchaser would acquire possession of the property as it is for the term of the lease subject to the conditions contained therein. To him, for practical purposes, the value of the lease of a mercantile building such as this would be measured by the difference between the expense of managing the leased property — rental, repairs, insurance, commissions for collecting rents, and similar items — and the subrentals which he does or might receive.
This rule indicates the nature of the evidence that may be received on a new trial. Doubtless experts *Page 161 
might testify as to the value of the lease. Doubtless much competent testimony might be given bearing more or less remotely upon the question at issue. But the present net return which it is said the lessee might receive is $24,500. The lease may be held for eighty-one years, less that part of the term which has already expired. Is $24,500 likely to be the average return until the end of the lease? If so, the present value of an income of $24,500 to be received until the end of the term is the clearest measure of the value of the leased estate. If not, what is likely to be the average net return for that time?
POUND and CRANE, JJ., concur with HOGAN, J.; ANDREWS, J., concurs in memorandum; HISCOCK, Ch. J., CARDOZO and McLAUGHLIN, JJ., concur in opinion and memorandum.
Order reversed, etc.