Springer v. Commissioner

ESTATE OF HENRY MONROE SPRINGER, VERA SPRINGER JONES, EXECUTRIX, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Springer v. Commissioner Docket No. 100125. United States Board of Tax Appeals 45 B.T.A. 561; 1941 BTA LEXIS 1100; November 5, 1941, Promulgated *1100 1. In 1926 the decedent, at the age of 66 and about 11 years prior to his death, transferred two 160-acre farms to his daughter. Held, under the facts, the transfers were not made in contemplation of death within the meaning of section 302(c) of the Revenue Act of 1926, as amended. 2. In 1935 the decedent, at the age of 75 and within two years prior to his death, transferred all of his farm lands, consisting of about 5,000 acres and representing a little less than one-half of his estate, to his three daughters and three grandchildren. Held, under the facts, the statutory presumption that such transfers were made in contemplation of death has not been overcome. 3. The respondent did not err in determining the fair market value at the time of the decedent's death of (1) house and lot in Mitchell, Nebraska; (2) 100 shares of stock in the First National Bank of Mitchell, Nebraska; (3) 37 shares of stock in the First National Bank of Morrell, Nebraska; and (4) promissory note of L. D. Merchant. Floyd E. Wright, Esq., and William H. Wright, Esq., for the petitioner. Angus R. Shannon, Jr., Esq., for the respondent. TURNER *561 *1101 The respondent determined a deficiency in estate tax in the amount of $30,693.81. The principal issue is whether certain farm lands transferred by the decedent during his lifetime to his daughters and grandchildren were transferred in contemplation of death within the meaning of the statute and for that reason includable in his gross estate. Other issues involve the fair market value of certain properties owned by the decedent at the time of his death. FINDINGS OF FACT. The decedent, Henry Monroe Springer, died testate on March 9, 1937, at the age of 77 years. Vera Springer Jones, his youngest daughter and sometimes referred to as Vera Jones, is the executrix of his estate and the petitioner herein. She filed an estate tax return with the collector of internal revenue for the district of Nebraska, reporting a gross estate of $196,624.38 and a total net tax of $16,800.40. The decedent was survived by his wife, Alice Springer, and three married daughters, Ruby Merchant, Odessa Dearing, and Vera Springer Jones, the latter of whom had three minor children, Audra Louise Jones, Oliver Springer Jones, and Betty Jeane Jones, whose *562 ages ranged from about two to thirteen*1102 years. Odessa Dearing and Ruby Merchant are about nineteen and sixteen years older than Vera Springer Jones and both have older children. At all times material hereto Odessa Dearing has resided at Torrington, Wyoming. About 1926 Ruby Merchant and her husband, L. D. Merchant, were residing in Wyoming. A year or two later they moved to New Mexico, where they have since resided. For a number of years prior to his death the decedent was a resident of Mitchell, Nebraska. During this period he was engaged in the business of farming and cattle feeding and was a stockholder and director of the First National Bank of Mitchell and the First National Bank of Morrell, Nebraska. During his lifetime he accumulated a considerable estate, a large portion of which consisted of irrigated farms situated in the vicinity of Mitchell and across the state line in Wyoming. About 1922 or 1923 Vera Jones and her husband, Oliver L. Jones, moved to Wyoming so that the latter could assist the decedent in the operation and management of his farms in that state. In addition to managing the farms and looking after the reservoir, Jones and his wife also operated a small store, which was situated on one*1103 of the decedent's farms. They lived in two small rooms in the back of the store and were not well satisfied with the situation. They often expressed their feelings to the decedent, but he asked them to remain there because he needed some one to stay on the farms who was interested in looking after them and said that later on he would "make things right" if they stayed with him. In 1926 the decedent deeded to Vera Jones two 160-acre farms situated in Scotts Bluff County near Mitchell, Nebraska. He felt that she and her husband deserved the farms, since they were remaining in Wyoming and looking after his farms in that state; and, further, he had helped his two older daughters to acquire their homesteads and he said that he wanted Vera Jones to have something of her own. The deeds to these two farms were executed on May 8 and 19, 1926, and recorded on July 29, 1933. About 1930 Vera Jones and her husband returned to Mitchell, Nebraska, where the latter continued to assist the decedent in the management of his farms and his cattle feeding business. They lived in the home of the decedent until about 1934 and then moved to their own home in mitchell, where they have since resided. *1104 In July 1933 the decedent went to the Wheatland General Hospital, Wheatland, Wyoming, for a physical examination. The written report of that examination contains a page entitled "History and Preliminary Examination", which shows that the decedent's weight *563 was 225 pounds, appetite good, sleep good, bowels not regular, blood pressure 204/110 L.H., that for about three months he had been suffering from pains over his heart and sternum; that the pains were quite severe and at first were associated with gas in his abdomen; that the pains were brought on by waking up suddenly, walking too fast, or taking business too strenuously; that for the past two years he had been bothered with dizzy spells, once after walking up stairs while in the Nebraska Legislature, once at home while driving his car, at which time he stopped the car and vomited and had to lie on the porch before going into the house; that he was sometimes awakened at night with dizzy spells; that the preceding fall he had pain at the back of his neck and left shoulder which had been diagnosed as neuralgia; that his mother died at the age of 86; and that his father died at the age of 73, possibly from heart trouble. *1105 An excerpt from the report pertaining to the examination of the decedent's heart reads as follows: This heart is slightly enlarged to the left and downward. The land is noticeably slower than we usually see normally. The tones are of fair quality. The first heart sound is loud and rough. The second sound is not so loud in character. One might say these sounds are impure but there is no definite murmur heard. X-ray examination verifies our physical findings. Heart enlarged slightly to the left and downward. Fluoroscopic examination unsatisfactory because of the thickness of this man's chest. This report does not show whether any treatment was administered or recommended to the decedent. In October 1935, at which time the decedent had practically retired from active business in so far as the management of his farms was concerned, he requested C. W. Wright, who was then cashier of the First National Bank of Mitchell, to prepare deeds of conveyance covering all of his farm and ranch lands to his three daughters and the three children of Vera Springer Jones. Pursuant to his instructions, seven deeds were prepared as follows: From the decedent and wife to (1) Vera Springer*1106 Jones, 3 tracts containing 160 acres each, situated in Scotts Bluff County, Nebraska; (2) to Ruby Merchant, 6 tracts containing from 80 to 320 acres each, situated in Goshen County, Wyoming; (3) to Odessa Dearing, 14 tracts containing from 40 to 320 acres each, situated in Scotts Bluff County, Nebraska; (4) to Odessa Dearing, 10 tracts containing from 40 to 320 acres each situated in Goshen County, Wyoming; (5) to Betty Jeane Jones, 1 tract containing 160 acres, situated in Scotts Bluff County, Nebraska; (6) to Audra Louise Jones, 2 tracts containing 50 and 150 acres, situated in Scotts Bluff County, Nebraska; and (7) to Oliver Springer Jones, 3 tracts containing 99, 160, and 160 acres, respectively, situated in Scotts Bluff County, Nebraska. The deeds of conveyance to his three daughters were executed by the decedent on November 27, 1935, and *564 recorded in December 1935. The deeds to his three grandchildren were executed by him on October 5, 1935, and recorded on January 9, 1937. F. A. Tallon, a public accountant with offices at Scotts Bluff, Nebraska, was employed by the decedent for the years 1930 and 1931 and from 1934 to 1937, inclusive, to prepare is income tax*1107 returns. About the first week in March 1936 Oliver Jones, the decedent's son-in-law, visited Tallon's office and brought with him all of the material necessary for preparing the decedent's income tax return for the calendar year 1935. Tallon asked if the decedent had deeded some property during 1935 and Jones informed him that he had. Tallon called Jones' attention to the fact that it might be necessary to file a gift tax return and Jones said he would call the decedent's attention to the matter. Within a few days or so after that conversation Tallon went to the decedent's home and discussed with him the filing of a gift tax return, at which time the decedent asked numerous questions concerning the gift tax liability, which questions indicated that he knew little or nothing about the gift tax. Tallon undertook an explanation of the tax on gifts, informing the decedent that it would be necessary for him to make a gift tax return wherein he should report the gifts made and should state his reasons for making the gifts. He advised the decedent that "a gift made in contemplation of death would be added back to the estate upon his death if it was given while he was suffering from*1108 some incurable disease or ailment that might prematurely shorten his life." The decedent furnished Tallon with a memorandum giving the descriptions of the farms conveyed and their values. The list included the two farms deeded to Vera Springer Jones in 1926, but did not show the dates of conveyance. There was no discussion as to the dates the deeds were executed, but Tallon assumed that all of the conveyances were made during 1935, and in preparing the gift tax return he included the two farms covered by the 1926 deeds as well as those conveyed in 1935. The return was filed on March 16, 1936, and disclosed gifts of 41 parcels of real property embracing approximately 5,000 acres, divided among the decedent's three daughters and three grandchildren. The gifts were reported as having a gross value of $100,053, and the return showed a tax due in the amount of $226.19. The reason disclosed by the gift tax return for the making of the gifts to his daughters was "to assure [their] financial independence * * * and to shift the responsibility in the supervision and management of land which had become burdensome," while with respect to his grandchildren the reason stated was "to assure*1109 [their] financial independence." The decedent was of the opinion that his farms were his best investments and at various times had told his daughter, Vera Springer *565 Jones, that his greatest aim in life was to build an estate for his family and that it was his hope that his children would always keep the property so accumulated. He had told his daughters that it was his intention that his lands should be divided among them. To his niece he had particularly spoken of conveying property to Vera Jones and had expressed the hope that she would be able to keep her property together and that he wanted "to advise her how to run her business while he was still living." To his niece's husband he had expressed the intention of giving his property "to his heirs, the ones he wanted to have it." In the fall of 1936 the decedent consulted Dr. Kenneth A. Ohme of Mitchell, Nebraska, one complaint being gas pains in his stomach. Upon examination Dr. Ohme found that the decedent's blood pressure was slightly elevated, but he discovered no heart trouble. On February 25, 1937, the decedent again went to Dr. Ohme's office, complaining of a bruised or scratched hand. His hand had been*1110 injured several days before by a falling object. The doctor dressed the injured hand, and for several days it seemed to get better. Suddenly the decedent became ill, with a high fever, and was taken to a hospital. He continued to get worse, and on March 9, 1937, died as a result of blood poisoning. In addition to his other activities, the decedent some six or eight years prior to his death had served two years as state senator, spending considerable time in Lincoln, Nebraska. At that time or later he also served as mayor of Mitchell. His business activities to some extent continued until a short time prior to his death. He attended a directors' meeting of the First National Bank of Mitchell after the injury to his hand and some ten days or two weeks before his death had been engaged in negotiations for making a loan of $25,000 on business property situated in Scotts Bluff. At or about the same time he was expressing some interest over the prospects of buying farm lands in Kearney or Grand Island County, Nebraska, where, in his opinion. some farms were being sold for less than they were worth. The above transfers of farms and ranch lands to his daughters and grandchildren*1111 were listed in the estate tax return, but the properties were not included in the gross estate. In determining the deficiency herein the respondent has determined that all of the said properties were transferred in contemplation of death within the meaning of section 302(c) of the Revenue Act of 1926 as amended, and in accordance with that conclusion has increased the gross estate by the amount of $144,440. The transfers of the two farms by deeds executed in 1926 to Vera Springer Jones were not made in contemplation of death within the meaning of section 302(c), supra. The transfers of farm and ranch *566 properties made in 1935 by the decedent to his three daughters and three grandchildren were made in contemplation of death. At the time of his death decedent owned the house in which he lived and the lot on which it was located. This property was located in Mitchell and was reported in the estate tax return at a value of $4,000. The respondent has determined that its fair market value at the date of decedent's death was $5,500. The house is a two-story frame and brick structure, with a garage. It was constructed about 1914, and has been well maintained. It is*1112 located in a very desirable part of the town of Mitchell, which has a population of about 2,000 inhabitants. The fair market value of the house and lot at March 9, 1937, was $5,500. One hundred shares of stock in the First National Bank of Mitchell owned by the decedent at the date of his death were reported in the estate tax return at $200 per share. The respondent has determined a value of $290 per share. The authorized and outstanding stock, consisting of 500 shares of the par value of $100 per share, was closely held by the 6 directors and no sales had been made shortly prior to or at about the time of the decedent's death. The records of the bank showed profits and dividends paid from 1932 to 1936, inclusive, as follows: Year Profits Dividends paid Percent [1932] $394.01 [1933] 8,851.23 None [1934] 9,087.61 [1935] 5,126.56 [1936] 22,120.71 [10] A statement of the condition of the bank at the close of business on June 30, 1937, attached to the estate tax return, shows capital stock, $50,000; surplus, $14,000; and undivided profits, $31,860.48; or a book value of $191.71 for each share of stock outstanding. On November 28, 1937, C. *1113 W. Wright, cashier of the First National Bank of Mitchell, purchased from the decedent's widow, Alice Springer, 10 shares of stock in the First National Bank at $350 per share. Wright purchased the stock in order to qualify as a director of the bank and, while he paid Alice Springer $350 per share, he was reimbursed by the other stockholder-directors to the extent of $100 per share. He had tried to purchase stock from the other directors, who held all the outstanding stock except the 100 shares held by Alice Springer, but they did not want to sell. At about the time of the decedent's death the directors had entered into or were preparing to enter into an agreement whereby 10 shares of the stock of each director would be placed in escrow with the understanding that, if *567 anything happened to a director, 3 of the remaining directors would have the authority to sell the 10 shares of his stock for such price as they thought was right and to such party as they felt would make a good director. The fair market value of 100 shares of stock in the First National Bank of Mitchell as of March 9, 1937, was $29,000, or $290 per share. Thirty-seven shares of stock in the First*1114 National Bank of Morrell were reported in the estate tax return at $250 per share. The respondent has determined a value of $300 per share. The authorized and outstanding stock of this bank, which consisted of 250 shares of the par value of $100 per share, was closely held, largely by the same individuals who owned the stock of the First National Bank of Mitchell. The two banks are about the same size and are located in towns about ten miles apart. No sales of this stock were made at or about the time of the decedent's death. A statement of the condition of the bank at the close of business on June 30, 1937, attached to the estate tax return, shows capital stock, $25,000; surplus, $25,000; and undivided profits, $14,351.16, or a book value of $257.40 for each share of stock outstanding. The books of the bank showed profits or losses and dividends paid from 1932 to 1936, inclusive, as follows: Year Profits Dividends paid Percent [1932] 1 ($1,966.80) None [1933] 1 (468.35) None [1934] 2,042.27 [1935] 6,907.58 [1936] 16,540.18 [30] The fair market value of 37 shares of stock in the First National Bank of Morrell as of March 9, 1937, was*1115 $11,100, or $300 per share. An unsecured promissory note of L. D. Merchant, son-in-law of the decedent, was returned at no value. This note was dated at Mitchell, Nebraska, March 7, 1927, payable to the decedent six months after date in the face amount of $2,139.27 and the respondent has determined that it had a value in that amount. No payment of interest or principal was ever made on the note and the record does not show whether the decedent ever made any effort to collect it. At the time the note was executed by Merchant, he and his wife were residing in the State of Wyoming. A year or so later they moved to New Mexico, where Merchant has since been engaged in the ranching business. The fair market value of the Merchant note as of March 9, 1937, was $2,139.27. *568 On September 9, 1936, the decedent executed his last will and testament. He bequeathed to his wife the residence in Mitchell, the shares of stock in the two banks above described, and certain paving bonds of the city of Mitchell; to Odessa Dearing, $100; to Ruby Merchant, $100 and "all moneys due me from herself and Lou D. Merchant"; and to Vera Springer Jones all the other property both real and*1116 personal found belonging to him. In the envelope with his will was a paper dated September 9, 1936, addressed to Vera Springer Jones, suggesting that after all expenses were paid he wanted her to share the notes, bonds, and money equally with Odessa Dearing and Ruby Merchant. OPINION. TURNER: The principal question presented in this proceeding is whether farm and ranch properties conveyed by the decedent during his lifetime to his daughters and grandchildren were transferred in contemplation of death within the meaning of section 302(c) of the Revenue Act of 1926, as amended, and were therefore a part of his gross estate. The determination of this question depends upon the impelling cause or motive for making the transfers. If the thought of death was the impelling cause, they were made in contemplation of death within the meaning of the statute. If the dominant motive was associated with life rather than death, the statute has no application. , and . The statute provides that "any transfer of a material part of his property in the nature*1117 of a final disposition or distribution thereof made by the decedent within two years prior to his death without such consideration shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this title." With respect to the transfers of the two farms deeded by the decedent to Vera Springer Jones in 1926, we are convinced that such transfers were not made in contemplation of death. For several years Vera Jones and her husband had been living on and managing the decedent's farms in Wyoming. They also were operating a small store situated on one of the farms and lived in two small rooms in the back of the store. They were not at all satisfied and had often expressed their feelings to the decedent. They remained, however, upon the decedent's request and his assurance that he would "make things right" if they did stay while he lived. They complied with the decedent's request and the transfers resulted. Furthermore, the decedent had already helped his two older daughters to acquire their homesteads and felt that these transfers to Vera *569 Jones would equalize his gifts to his three daughters. These facts, in our opinion, *1118 demonstrate that contemplation of death was not the motive for the transfers to Vera Jones under the deeds executed in 1926. An entirely different set of circumstances surrounds the conveyances made in 1935. Decedent at that time was 75 years old. He had accumulated a substantial estate and felt that his farm lands were the most important part of that estate. It was his desire and hope that these lands would continue to be held by members of his family after he was gone. He previously had aided each of his three daughters in establishing themselves with their husbands on properties of their own, and in 1935 decided to and did divide all of his farm and ranch lands among his daughters and the three children of Vera Springer Jones. These transfers having been made within two years prior to decedent's death, the statutory presumption that they were made in contemplation of death attaches and the burden is on petitioner to show otherwise. It is the claim of petitioner that the presumption has been overcome by proof and that the dominant motive behind the transfers has been shown to have been associated with life rather death. In substance the argument of the petitioner seems*1119 to fall into three parts: (1) That the decedent "was in excellent health both before and after" the transfers and there was nothing about his physical condition at the time the transfers were made to prompt anything resembling a testamentary disposition of property; (2) that one reason for making the transfers in 1935 was that the decedent understood that the gift tax rates would be increased in the succeeding year and that the gift tax "is certainly a matter associated with life" and not with the thought of death; and (3) that the transfers had been contemplated for some time and were made by the decedent both for the purpose of relieving himself of the continued burden of management of the properties and because he desired that his daughters should have the benefits of the properties and the responsibility of looking after the land while he was still alive and able to advise with them in their management. In support of her contention that the decedent was in excellent health and there was nothing about his physical condition at the time of the transfers to prompt anything resembling a testamentary disposition of property, petitioner points to the testimony of Dr. Ohme, which was*1120 to the effect that the decedent was in excellent health, and to other testimony that decedent had not been known to have had a serious illness until that which caused his death, and, except for the fact that he no longer managed any farms, his business activities continued much the same up to the date of his death. *570 These things, the petitioner says, negative the proposition that the transfers were made in contemplation of death. Much of the argument between the parties centers around the condition of petitioner's heart. Dr. Ohme's testimony was that decedent had no heart trouble and knew that the pains in the vicinity of his heart were gas pains. On the other hand, the testimony of Carl G. Weaver, supported by the testimony of Tallon and by the report of a general physical examination of decedent at the Wheatland General Hospital in 1933, convinces us that the decedent thought he was afflicted with heart trouble. Vera Springer Jones testified that she had urged both her father and mother to submit to a physical examination and the examination at the Wheatland General Hospital had followed. Dr. Ohme indicated that he was familiar with the report. One page, designated*1121 "History and Preliminary Examination", contained much information, obviously obtained from decedent. That statement disclosed that the decedent had been suffering from pains over his heart, "at first" associated with gas in his abdomen. The statement of the examination indicated an enlargement of the heart. It may be that the enlargement of the heart disclosed by the examination was not serious, but such statement of enlargement was nevertheless contained in the report and we have no reason to doubt that the decedent was familiar with that report. Subsequent acts and statements indicated a fear on his part that he had serious heart trouble. He so advised Carl G. Weaver in January 1937. Weaver is a revenue agent, but was engaged in income tax work and was not concerned with estate and gift tax matters, nor with the state of decedent's health. With Tallon, decedent's representative in tax matters, he had called to discuss some matters pertaining to decedent's income tax returns for 1933 and 1935. Tallon did not remember decedent's statement that he was suffering from angina pectoris, but he did remember decedent's remark with respect to his bad night and the pounding in his chest. *1122 We have no doubt that Weaver correctly recounted the substance of decedent's conversation and that decedent told Weaver that he was suffering from angina pectoris and might die at any time or with care might live for a long time. In the light of this testimony, claims of the petitioner that there was no heart condition and the testimony of Dr. Ohme that the decedent knew that the pains in the vicinity of his heart were gas pains and that the average individual is fully aware that such pains are attributable to gas and not heart trouble lose their force as indicating decedent's state of mind with respect to his condition. As to the gift tax, we are convinced that the decedent knew little, if anything, about it and that the imminence of a change in the gift tax rates had nothing to do with the transfers occurring in 1935, even *571 though it be assumed for present purposes that a transfer motivated by a possible increase in gift tax rates is, as the petitioner contends, a matter associated with life and not with the thought of death. It may be that the decedent had considered the possibility of avoiding estate or inheritance taxes or the lessening of his income and general*1123 tax burdens by making the transfers in question and had discussed those possibilities with some of the witnesses. The circumstances under which the gift tax return was prepared and filed in 1936, the inclusion in that return of properties conveyed in 1926, and the conversations between the decedent and Tallon leave no doubt in our minds, however, that the decedent knew little, if anything, about gift taxes prior to the time Tallon suggested to decedent's son-in-law, Oliver L. Jones, that a gift tax return should be filed. More difficult of determination is the petitioner's claim that the transfers were prompted by the desire of the decedent to give to his daughters and grandchildren the immediate benefits of ownership of the properties while he was still alive and able to advise in their management and that the transfers were not therefore made in contemplation of death. Considerable testimony was offered in support of the claim stated. The decedent, it would seem, had discussed the matter quite freely with numerous individuals, and the witnesses who testified about such conversations included two of decedent's daughters, his niece and her husband, his tax consultant, and the*1124 cashier and teller at the First National Bank of Mitchell. One difficulty in giving to the testimony of these witnesses the weight desired by the petitioner is that the witnesses in many instances appeared to be laboring over the phraseology of their answers instead of giving simple expression to the thoughts contained in the statements attributed to the decedent. Another difficulty from the petitioner's standpoint is that much of the testimony would give equal support to the proposition that the decedent was discussing his plans for the disposition or division to be made of his property at death. To Vera Springer Jones, for instance, he had explained that his greatest aim in life was to build an estate for his family and expressed the hope that his children would always keep the property so accumulated. He told his daughters that it was his intention to divide his lands among them. To his nephew he had expressed the intention of giving his property "to his heirs, the ones he wanted to have it." Other statements made to Vera Springer Jones and his niece, Retta Elliott, might well have been directed to the property conveyed to Vera Jones in 1926 and have had to do with her management*1125 of the properties then conveyed. On the other hand, statements by a father to the effect that transfers to his children were made for the purpose of relieving himself of the continued burden of managing the properties *572 conveyed and because of his desire to give his children the benefit of ownership as well as the responsibility of looking after the properties while he was still alive and able to advise them might under proper circumstances be regarded as justifying the conclusion that the transfers were not made in contemplation of death. Here, however, the husband of each of the decedent's daughters was experienced in managing and operating farm and ranch properties and the decedent himself had already shifted the management of his properties to Oliver L. Jones, husband of Vera Jones. At the time the gift tax return was prepared the decedent made a statement to Tallon somewhat as follows: "Of course, I let down work and haven't worked for several years, but I have a son-in-law who is taking the - looking after the farms and doing the supervision of the farms and feeding the sheep. I have let down quite a little since then." That statement certainly indicates no thought*1126 or feeling on the part of the decedent that continued participation by him in the management of the properties was either necessary or intended. By earlier transfers he had already established each of his daughters on homesteads of their own and the 1935 transfers accomplished the final and ultimate division among his children and grandchildren of all his remaining farm lands - considered by him as the most important part of the estate he had built for his family. The properties were conveyed to the natural objects of his bounty, "his heirs, the ones he wanted to have it." We are convinced that in making the 1935 transfers the decedent was taking what he considered the most important step in winding up his affairs, in putting his house in order, and with respect to those transfers we are of the opinion that they were made in contemplation of death within the meaning of the statute; surely petitioner has not overcome the statutory presumption that they were. The remaining issues call for the determination of the fair market value of the decedent's home in Mitchell, 100 shares of stock in the First National Bank of Mitchell, 37 shares of stock in the First National Bank of Morrell, *1127 and a promissory note of decedent's son-in-law, L. D. Merchant. A witness was called by each party to testify as to the fair market value of the decedent's home on the date of his death. From these witnesses various facts were brought out concerning the property, its age, condition and location in the town of Mitchell, together with various facts concerning the town which might have a bearing on the value of such property. From the evidence it is our conclusion, and we have found as a fact, that the fair market value of the house and lot on March 9, 1937, was $5,500. The stock of both the First National Bank of Mitchell and the First National Bank of Morrell was closely held and it was seldom *573 that any stock of either bank was sold. The banks to some extent were controlled by the same individuals. They were prosperous and in very sound condition. Facts and data concerning their capitalization, earnings and dividends, surplus and undivided profits, and the book value of the stock of each institution were submitted. Witnesses were called to express their opinions as to value. The petitioner took particular exception to the methods or formulas used by the respondent*1128 in making his determinations. We have often noted in our opinions that no set rule or formula is required in arriving at the fair market value of corporate or bank stock. One method might appear more readily applicable in one case and not in another. The end sought is the fair market value and not the method of arriving at value. After reviewing the testimony of the witnesses and other evidence tending to show the fair market value of the stock of the two banks, we have concluded that the respondent was justified in his determination that the fair market value of the stock of the First National Bank of Mitchell on March 9, 1937, was $290, while the fair market value of the stock of the First National Bank of Morrell on that date was $300. The note of L. D. Merchant was listed in the estate tax return as having no value. The face amount was $2,139.27 and the respondent has determined that it had a fair market value in that amount at the date of decedent's death. The note was dated March 7, 1927, and was payable six months after date. No payment of interest or principal was ever made and the record does not show whether the decedent at any time made an effort to collect it. *1129 The only argument advanced by the petitioner in support of her claim that the note had no value is that the statute of limitations on collection had run long prior to the date of the decedent's death. She has submitted no information concerning the ability of Merchant to pay the note. From the evidence it appears that Merchant was living in the State of Wyoming at the time the note was made and moved to New Mexico a year or so later, where he has since been engaged in the ranching business. The respondent, answering the petitioner's contention as to the statute of limitations, points to section 20-214 of the Nebraska Statutes, which provides that where an individual is out of the state "the period limited to the commencement of the action shall not begin to run until he comes into the state * * * and the time of his absence * * * shall not be computed as any part of the period within which the action must be brought." The facts of record do not show, as the petitioner claims, that the statute of limitations had run. See . There being no bar to collection of the note and the petitioner having failed to show the inability*1130 of Merchant to pay the note. *574 the action of the respondent in including the Merchant note in the gross estate of the decedent at its face value is sustained. Cf. . In the notice of the deficiency the respondent stated that no credit was allowed in respect of estate, inheritance, legacy, or succession taxes paid the State for the reason that evidence as to payment of such taxes required under article 9 of Regulations 80 had not been submitted. By his answer he now admits that the evidence has been submitted and effect should be given thereto in recomputing the deficiency hereunder. Decision will be entered under Rule 50. Footnotes 1. Loss. ↩