Fischer v. Commissioner

Lansdon:

The respondent has asserted a deficiency in estate tax in the amount of $315.60. The petitioner alleges that certain stock owned by the decedent had a value less than that determined by the respondent.

FINDINGS OF FACT.

Abraham Fischer, the petitioner of record in this proceeding, is a resident of the Commonwealth of Pennsylvania, and is the duly appointed administrator of the estate of Jonas Fischer, who died on November 30,1923.

At the date of his death the decedent owned 2,611 shares of the stock of the Citizen’s Electric Co. of Williamsport, Pa. In the Federal estate-tax return made by the petitioner, such stock was included in the gross estate of the decedent at $89.06 per share, or a total of $233,010.33. Upon audit of the return the respondent determined that the stock had a value of $93.08 per share at the date of decedent’s death, or a total of $243,590.36, and asserted the deficiency here in controversy.

The Citizen’s Electric Co. was a close corporation with 3,000 shares of stock outstanding. All such shares, in addition to those owned by the decedent, were the property of members of his family. Six weeks after the death of Fischer, the entire 3,000 shares of stock were sold by the owners for $301,500. Conditions of the sale were that the vendors retained certain physical assets of the company and all *1315its accounts receivable and assumed liability for the payment of all its accounts payable.

From the sale of the retained assets and the collection of the accounts receivable, the vendors realized the amount of $45,560.88. The cost of salvaging the assets sold was $1,862.14 and vendors paid the company’s accounts in the amount of $64,072.17. The net amount' received by the vendors for 3,000 shares of stock and the retained assets 'of the company was $287,126.56.

Judgment will be entered for the respondent.