Court Opinion

ID: 4603330
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:31:43.533236+00
Date Added: 2024-06-11T07:52:50.164262
License: Public Domain

CHARLES B. POWER AND JOHN M. POWER, EXECUTORS, ESTATE OF THOMAS C. POWER, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Power v. CommissionerDocket No. 10400.United States Board of Tax Appeals11 B.T.A. 1313; 1928 BTA LEXIS 3642; May 11, 1928, Promulgated *3642  1.  Executors' commissions and attorney's fees, the amounts of which were fixed and ordered paid by a court having jurisdiction of the estate, are deductible items from the gross estate.  2.  The fair market value of certain property owned by decedent at time of his death and included in his gross estate, determined pursuant to stipulation.  James A. Walsh, Esq., for the petitioners.  J. E. Marshall, Esq., for the respondent.  LOVE *1313  This proceeding is for the redetermination of a deficiency in estate tax on the estate of Thomas C. Power, deceased, in the amount of *1314  $14,252.71.  The petitioners allege that the Commissioner erred in increasing the valuation, as reported by the execuotrs, of (1) stock of Helena Building & Realty Co., (2) stock of Phoenix Development Co., (3) stock of Cascade Mercantile Co., and (4) real estate situated in Minneapolis.  It is further alleged that the Commissioner erred in disallowing as deductions from the gross estate the executors' commissions and attorneys' fees.  The parties hereto stipulated the fair market value at the time of decedent's death of the stocks and real estate in controversy. *3643  FINDINGS OF FACT.  The decedent, Thomas C. Power, died on or about March 16, 1923.  Charles B. Power and John M. Power were appointed executors of decedent's estate by the District Court of the First Judicial District of the State of Montana in and for the County of Lewis and Clark.  At the time of his death the decedent owned certain property, which consisted of and had at that time a fair market value as follows: (a) Stock, Helena Building & Realty Co$140,000(b) Stock, Phoenix Development Co7,200(c) Stock, Cascade Mercantile Co10,000(d) Real Estate in Minneapolis, Minn250,000On March 13, 1926, the District Court of the First Judicial District of the State of Montana in and for the County of Lewis and Clark, fixed, in pursuance of law, the executors' commissions and attorneys' fees at $22,000, respectively, and ordered the amounts paid in the regular course of administration.  In their return the executors claimed as deductions from the gross estate the amount of $21,390.82 as executors' commissions and the same amount for attorney's fees.  The Commissioner disallowed the deductions.  OPINION.  LOVE: The issues raised with respect to the*3644  Commissioner's action in determining the fair market value of the stocks and real estate in question are concluded by the valuations agreed upon by the parties hereto.  The deficiency insofar as it relates to the value of the stocks and real estate in question should be recomputed, giving effect to the fair market values thereof at the time of decedent's death, as set forth in the findings of fact.  The remaining question is whether, in determining the net estate, the executors are entitled to deduct the amount of their commissions and the amount of the attorneys' fees.  The executors' commissions in the amount of $22,000 and the attorney's fees in the same amount were fixed and allowed by the *1315  court having jurisdiction of the estate.  Clearly, the amounts so fixed and allowed are administration expenses and as such are deductible under section 403(a)(1) of the Revenue Act of 1921.  ; . Judgment will be entered under Rule 50.