Ankeny v. Commissioner

JOHN D. ANKENY, EXECUTOR, ESTATE OF LEVI ANKENY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Ankeny v. Commissioner Docket No. 8904. United States Board of Tax Appeals 9 B.T.A. 1302; 1928 BTA LEXIS 4261; January 14, 1928, Promulgated *4261 Certain bank credits held exempt from estate taxes under the provisions of section 403(a)(2) of the Revenue Act of 1918. John F. Watson, Esq., for the petitioner. J. E. Marshall, Esq., for the respondent. LANSDON *1302 The respondent has asserted a deficiency in estate tax in the amount of $11,911.21. The petitioner alleges that the respondent erred in including amounts previously taxed within five years, and in having twice included the same item in his determination of the gross estate. FINDINGS OF FACT. The petitioner is the regularly appointed and qualified executor of the estate of Levi Ankeny, who died on March 29, 1921, a resident of the State of Washington. The decedent and Jennie Nesmith Ankeny, deceased September 29, 1918, were husband and wife, and in their lifetime constituted a marital community under the laws of the State of Washington. The wife died testate, and left practically her entire estate to this decedent. *1303 On the date of the death of the wife the marital community, of which she was a member, had bank credit balances as follow: First National Bank of Pendleton, Oreg., $22,746.78; Colfax National*4262 Bank, $18,911.77; First National Bank of Waitsburg, $6,930.35; and Columbia National Bank of Dayton, $41,157.24, or a total of $89,746.14. One-half of such bank balances, the community interest of the wife therein at the date of her death, by will, was transferred to the decedent and the estate tax thereon was paid on October 28, 1918, or at a later date. Some deposits were made to and some checks were drawn on the bank accounts above set forth, between the deaths of the prior decedent and the decedent, but at no time during such interval was the credit balance in any of such accounts less than the amount received by the decedent from the estate of his wife. The only substantial withdrawal was the amount of $10,000, which was checked out of the Columbia National Bank and deposited in the First National Bank of Walla Walla, where it remained and was a part of the estate of the decedent at the date of his death. OPINION. LANSDON: The petitioner claims the right to deduct the amount of $44,873.07 from the value of the gross estate of the decedent under the provisions of section 403(a)(2) of the Revenue Act of 1918, which is as follows: An amount equal to the value at the*4263 time of the decedent's death of any property, real, personal, or mixed, which can be identified as having been received by the decedent as a share in the estate of any person who died within five years prior to the death of the decedent, or which can be identified as having been acquired by the decedent in exchange for property so received, if an estate tax under the Revenue Act of 1917 or under this Act was collected from such estate, and if such property is included in the decedent's gross estate. The circumstances upon which this claim is based are fully set forth in our findings of fact, above. The respondent has refused to allow the deduction on the theory that deposits to and withdrawals from the bank accounts in question, prior to the death of the decedent, resulted in a commingling of funds that makes it impossible to identify the amounts taxed within five years as a part of the estate of the prior decedent. The petitioner concedes some changes in the bank accounts, but proves beyond question that none of them at any time showed a smaller credit balance than on September 29, 1918, and that, therefore, the exact credits except as to the amount of $10,000, remained undisturbed*4264 until the date of the death of the decedent. The property transferred is designated as cash, and certainly, if that is true, the identical currency involved was not earmarked, and can not be identified. In fact, however, the values transferred *1304 to the decedent by the death and will of his wife were not cash, but credits in the several banks, and such credits remained unchanged until the death of the decedent. Neither the wife nor the husband had any actual cash in the bank which they could demand as specified and identified pieces of currency. The properties transferred were credits which were evidenced by the depositor's pass books and by the books of the several banks. Such credits were taxed as a part of the estate of the prior decedent. We are convinced that the property in question is amply identified as having been taxed to the estate of a prior decedent within five years of the death of the decedent. The petitioner prevails on this point. ; *4265 ; ; : . The petitioner introduced no evidence upon which we can base a finding of fact as to this second contention, and on this point the determination of the respondent is approved. Judgment will be entered on 20 days' notice, under Rule 50.