Dann v. Commissioner

MAX DANN, FANNY BANDLER, AND HENRY GROSS, EXECUTORS, ESTATE OF ISADOR H. BANDLER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Dann v. Commissioner Docket No. 32341. United States Board of Tax Appeals 20 B.T.A. 42; 1930 BTA LEXIS 2217; June 12, 1930, Promulgated *2217 1. The proceeds in excess of $40,000 of insurance policies on the life of the decedent payable to beneficiaries other than the decedent or his estate held properly included in decedent's gross estate. Chase National Bank v. United States,278 U.S. 327. 2. Tenancies by the entireties being recognized by the laws of Pennsylvania, the value of the decedent's interest in a resident at Philadelphia, acquired by the decedent and his wife in 1921 as tenants by the entireties, was properly included by the respondent in decedent's gross estate. Tyler v. United States,281 U.S. 497. Frank T. Horner, Esq., for the respondent. TRAMMELL *43 This is a proceeding for the redetermination of a deficiency in estate tax in the amount of $1,123.15. It is stated in the petition that the amount in controversy is $327.93. The petitioners allege that the determination of the tax is based on the following errors: (a) The action of the respondent in "attempting to tax as part of the decedent's estate the sum of $11,332.35 out of the sum of $51,332.35, proceeds of policies of life insurance," and, (b) The action of the*2218 respondent in "attempting to tax as part of the decedent's estate the sum of $9,666.65, one-half interest in the residence of the decedent." At the hearing there was no appearance on behalf of the petitioners and the case was submitted on the pleadings, from which the following facts are found. FINDINGS OF FACT. The petitioners are the executors of the will of Isador H. Bandler, who died on October 19, 1925, a citizen and resident of the city of Philadelphia, State of Pennsylvania. In addition to the policies of life insurance payable to decedent or his estate, which were included by the petitioners in their estate-tax return, there were policies of insurance on the life of the decedent payable to beneficiaries other than decedent or his estate, as follows: Policy issued by - Beneficiary Amount paid Equitable Life Assurance Society Fanny Bandler $ 1,489.65 Do do 4,894.15 Do do 7,313.95 Do do 2,439.11 New York Life Insurance Co do 5,024.44 Do do 5,026.30 Penn Mutual Life Insurance Co do 25,000.86 Total 51,188.46 The respondent erroneously determined the amount of said insurance to be $51,332.35, and included in the gross estate*2219 $11,332.35 as the amount of such insurance in excess of $40,000. *44 The decedent and his wife, on or about September 8, 1921, acquired the premises known as 6904 Chew Street, in the city of Philadelphia, Pa., and decedent's wife survived him. Respondent included in the decedent's gross estate "Jointly Owned Property - One-half interest in residence of decedent - $9,666.65." OPINION. TRAMMELL: In paragraph (e) 1 of the petition, it is alleged that there were policies of insurance on the life of the decedent payable to beneficiaries other than the decedent or his estate in the total amount of $51,188.46, as set forth in our findings of fact, above, and the answer of the respondent admits that there were such policies "in the respective amounts set forth in the petition." The deficiency letter, however, discloses that the respondent included in the decedent's gross estate "Insurance in excess of $40,000 - $11,332.35." Thus, under the respondent's admission, the amount of insurance included in the gross estate is excessive to the extent of $143.89, which error should be corrected in the recomputation of the deficiency. The petitioners further allege in their pleadings*2220 that the respondent erred in holding that said insurance constituted a part of the decedent's estate for the purpose of estate tax, and that "the provision of the statute imposing the estate tax on proceeds of life insurance payable to beneficiaries other than the decedent or his estate, is unconstitutional and without effect." There was no appearance at the hearing on behalf of the petitioners and the case was submitted on the pleadings, but thereafter the petitioners filed a brief in which it was stated: The only question at issue is one of law, whether or not property held by the decedent and his wife as tenants by the entireties is subject to the estate tax. From this, we assume that the petitioners have abandoned the issue raised by them in respect of the insurance included in the decedent's gross estate, above referred to, but if we are mistaken in so assuming, there appears nothing in this record to distinguish the case from the case of , decided adversely to the petitioner's contention. On this issue the determination of the respoondent is approved except as above modified. *2221 The second issue involves the action of the respondent in including in the decedent's gross estate the amount of $9,666.65 as representing his one-half interest in the residence acquired by the decedent and his wife at Philadelphia, Pa., in 1921 and held by them as tenants by the entireties. The petitioners assail this action of the *45 respondent and allege that "the provision of the statute imposing the estate tax is unconstitutional and without effect." Tenancies by the entireties being recognized by the laws of Pennsylvania, this case comes within the decision of the Supreme Court of the United States in , on authority of which the action of the respoondent on the second point herein is approved. See also . Judgment will be entered under Rule 50.