*4133 1. Gifts of stock herein were not made by decedent in contemplation of death.
2. Deduction allowed of $10,000 authorized by the probate court for the support of dependents during the period of administration of decedent's estate.
*285 The Commissioner determined a deficiency in estate tax of $4,042.52. The executor claims that the Commissioner erred in refusing to allow a deduction of $10,000 for the support of dependents during the period of administration of the estate and in holding that certain shares of stock valued by the Commissioner at $208,658.70 were transferred by decedent in contemplation of death.
FINDINGS OF FACT.
Louis Wolferman died of pneumonia on October 20, 1923, at the age of 79 years. Fred Wolferman, his son, is the duly appointed, qualified and acting executor of the estate. Louis Wolferman was ill less than a week prior to his death. For several years prior to 1923 the decedent had suffered to some extent from diabetes and on certain occasions from bronchitis. Neither the decedent nor his physician, who had attended*4134 him for many years, at any time prior to decedent's death considered the decedent's ailment a serious matter or at all likely to result in his death within the near future. The decedent was always careful of his diet and was at no time prevented by illness from being active in carrying on his business. Except for the attack of pneumonia a few days prior to his death, the decedent doubtless would have lived several years longer. For a period of more than 25 years prior to the date on which the decedent became ill with pneumonia he had suffered from no illness that would cause him to contemplate death within the reasonably near future, nor was he away from his business for any length of time on account of illness.
*286 Since 1888 the decedent had been actively engaged in the grocery and meat business and since 1913 had also been engaged in operating dairy farms. Since 1888 the decedent was assisted by his son, to whom he originally gave a small interest in the business. From time to time the decedent increased the son's interest in the grocery and meat business and in 1907 when the business was incorporated under the name of Fred Wolferman, Inc., the son was given a 50*4135 per cent interest in the corporation. At the beginning of the year 1921, the capital and surplus of the corporation was at least $400,000. The corporation was a family affair, managed and controlled by the decedent and his son. No dividend was ever paid by the corporation and no money, other than salaries paid to the decedent and his son, was withdrawn from the business. For several years prior to his death the decedent had expressed his intention of dividing his stock between his wife and married daughter. The latter had lived with the decedent for many years. About 1913 the decedent acquired a dairy farm which he managed and operated for the production of dairy and farm produce to be distributed and sold by Fred Wolferman, Inc. As time went on the decedent gave less personal attention to the affairs of the corporation and devoted more time to the operation of the farm. His activities in connection with the corporation consisted principally of advising with the son from time to time and occasionally going over the affairs of the corporation with him. The management and operation of the corporation in the carrying on of the grocery and meat business was left to the son, to*4136 whom the decedent had given a general power of attorney to handle all of the affairs of the corporation. The decedent was president of the corporation and received a salary of $10,000 until a few years prior to his death when the amount was reduced to $7,500 per annum. His son was vice president and manager of the corporation and received a salary of $25,000 per annum. Beginning about 1920, the decedent devoted his time and attention almost exclusively to the operation of the farm. In January, 1921, the decedent made a gift of all but ten shares of his stock in Fred Wolferman, Inc., to his wife and daughter. At that time the decedent was in good health, was actively engaged in business and did not contemplate death within the reasonably near future. The gift of the stock was not made by the decedent in contemplation of death.
The decedent's estate was administered in the States of Kansas and Missouri. During the administration thereof the probate court in the State of Kansas made an allowance and ordered the payment of $10,000 for the support of the widow during the period of administration. There were insufficient funds in the Kansas estate out of *287 which to pay*4137 this allowance and the probate court in Missouri ordered the payment of the $10,000 out of the Missouri estate and this was done. The Commissioner included the stock representing the gift of decedent to his wife and daughter in the gross estate at a value of $208,658.70 and disallowed the deduction of $10,000 for the support of the widow during the administration and determined the deficiency here in controversy.
OPINION.
LITTLETON: The Board is of the opinion from the evidence submitted in this proceeding that the stock in question was not transferred by the decedent in contemplation of death within the meaning of the statute. The evidence completely overcomes the prima facie correctness of the Commissioner's determination that the gift was made in contemplation of death. .
The amount of $10,000 claimed as a deduction for the support of a dependent was allowed by the probate courts of Kansas and Missouri and was paid. This was a proper deduction in determining the value of the net estate subject to tax. *4138 . The Commissioner asserted in his answer to the petition that he had erred in excluding from gross estate automobiles of the value of $500 and household furniture of the value of $1,900. The burden of proving these allegations was upon the Commissioner. No evidence was submitted by him in support thereof and we hold therefore that the gross estate should not be increased in these amounts.
Judgment will be entered on 15 days' notice, under Rule 50.