O'Brien v. Commissioner

BLANCHE O'BRIEN AND ROBERT C. ROEBLING, EXECUTORS UNDER THE LAST WILL AND TESTAMENT OF KARL G. ROEBLING, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. O'Brien v. Commissioner Docket No. 13042. United States Board of Tax Appeals 10 B.T.A. 682; 1928 BTA LEXIS 4048; February 13, 1928, Promulgated *4048 Taxes paid by the executors to the State of New Jersey under the transfer tax statute are legal deductions from gross income of the estate for the taxable period. Arthur O'Brien, Esq., for the petitioners. James A. O'Callaghan, Esq., for the respondent. LITTLETON *682 The Commissioner determined a deficiency in income tax of $8,754.26 for the period May 30 to December 31, 1921. This deficiency is due to the restoration to income by the Commissioner of the sum of $90,000 deducted in the income-tax return of the estate for the taxable period as a transfer tax paid to the State of New Jersey. The position of the Commissioner is that this tax was a charge against the legatees of the estate and was not, therefore, a proper deduction. FINDINGS OF FACT. Blanche O'Brien and Robert C. Roebling are the duly appointed, qualified and acting executors under the last will and testament of Karl G. Roebling, who died a resident and citizen of Spring Lake, N.J., on May 29, 1921. The executors paid a transfer tax of $90,000 to the State of New Jersey during the taxable period. The decedent left a will and by clause 14 thereof he directed that all*4049 transfer and inheritance taxes be paid by his executors out of the residuary of his estate, and that such payment should be treated as a part of the general expenses of administration of the estate. OPINION. LITTLETON: The question whether the transfer tax imposed by the laws of the State of New Jersey is a proper deduction from income of the estate was before the Board in the proceeding of , and the proceeding of , wherein the Board held that such tax was a proper deduction from gross income of the estate. The respondent has cited the cases of ; ; ; ; *683 ; . These decisions have been considered in the light of the decisions of the Supreme Court in *4050 ; , and decisions of the Board heretofore mentioned, and we find nothing therein which warrants the holding that the New Jersey transfer tax is not a proper deduction from gross income by the estate. The amount of $90,000 paid by the executors to the State of New Jersey was a proper deduction from gross income for the taxable period. Judgment will be entered on 15 days' notice, under Rule 50.