*3173 Respondent's valuation of assets for estate-tax purposes approved.
*864 This is a proceeding for the redetermination of a deficiency in estate tax asserted in the amount of $808.29, being the rejected portion of a claim in abatement for $4,603.33. The errors assigned by the amended petition are that the respondent (1) erroneously included the value of jointly owned personal property at $197,011.10, when its value was $135,604.19; (2) erred in failing to consider as a liability of the estate one-half of certain state taxes paid by the partnership of Moore & McFerren in 1922; (3) erred in failing to consider as a liability of the estate $32.88 Illinois taxes; (4) erred in accepting the value of real estate at $744,432.50, when its value was $366,350; and (5) erred in taking a net worth for the inventory of the partnership of Moore & McFerren when it was, in fact, insolvent.
FINDINGS OF FACT.
The petitioner is a resident of Hoopeston, Ill., and is administratrix of the estate of William Moore, who died testate at Hoopeston, November 17, 1921.
*3174 An estate-tax return for the estate of William Moore was filed by the petitioner with the Collector of Internal Revenue of the Eighth District of Illinois, on November 22, 1922, showing a total gross estate of $696,326.44, deductions of $379,783.24, a net estate of $316,542.90, and a tax of $8,161.72. A table showing the items returned, recommended by the report of an examining officer, upon which assessment was made and finally determined by the respondent as the basis of his action on a claim in abatement for $4,603.33, is as follows:
| Returned (Form 706) | Recommended in report | Determined by Commissioner | |
| GROSS ESTATE | |||
| Real estate | $378,538.25 | $389,443.25 | $381,043.25 |
| Stocks and bonds | 124,727.50 | 126,285.86 | 126,285.86 |
| Mortgages, notes, cash, and | |||
| insurance | 9,198.30 | 8,298.22 | 8,298.22 |
| Jointly owned property | 0 | 0 | 0 |
| Other miscellaneous property | 167,000.75 | 197,011.10 | 197,011.10 |
| Transfers | 16,861.34 | 103,337.34 | 16,861.34 |
| Powers of appointment | 0 | 0 | 0 |
| Property identified as | |||
| previously taxed | 0 | 0 | 0 |
| Total gross estate | 696,326.14 | 824,375.77 | 729,499.77 |
| DEDUCTIONS | |||
| Funeral expenses | 1,189.00 | 1,189.00 | 1,189.00 |
| Executor's commissions | 0 | 0 | 0 |
| Attorney's fees | 0 | 0 | 0 |
| Miscellaneous administration | |||
| expenses | 338.00 | 338.00 | 338.00 |
| Debts of decedent | 327,594.24 | 327,594.24 | 327,594.24 |
| Unpaid mortgages | 0 | 0 | 0 |
| Net losses during settlement | 0 | 0 | 0 |
| Support of dependents | 0 | 0 | 0 |
| Property identified as | |||
| previously taxed | 0 | 0 | 0 |
| Charitable, public and | |||
| similar gifts and bequests | 1,000.00 | 500.00 | 500.00 |
| Specific exemptions | |||
| (resident decedents only) | 50,000.00 | 50,000.00 | 50,000.00 |
| Total deductions | 380,121.24 | 392,749.46 | 392,749.46 |
| Total gross estate | 696,326.14 | 824,375.77 | 729,499.77 |
| Total deductions | 380,121.24 | 392,749.46 | 392,749.46 |
| Net estate | 316,542.90 | 431,626.31 | 336,750.31 |
| Total tax | 8,161.72 | 12,765.05 | 8,970.01 |
| Deficiency tax | 4,603.33 | 808.29 |
*3175 *865 The decedent, William Moore, was engaged in the canning business and had a half interest in the partnership of Moore & McFerren, which owned and operated a box factory and saw mill at Memphis, Tenn., a saw mill, stave mill, and heading mill at Luxora, Ark., a plantation of about 4,700 acres in various stages of cultivation west of Luxora, Mississippi County, Ark., timberland of about 7,500 acres adjoining it in the same county and timberlands in Shelby and Lauderdale Counties, Tennessee, and Craighead and Chichot Counties, Arkansas.
On the death of William Moore, whose will provided that the partnership assets should be sold and the debts paid within three years, appraisers were appointed to appraise the assetsof Moore & McFerren. The appraisers went over the land and examined the other property in the spring of 1922. One appraiser was a real estate man who lived seven or eight miles from the Arkansas property, another was a banker from the same vicinity, and the third was an experienced business man who was familiar with real estate values. The appraisal that they made after obtaining the opinion of real estate dealers familiar with the values in the vicinity, *3176 was based upon their judgment as to the land on the date of the decedent's *866 death and assumed that the farming property was adequately drained. The values on personal property they took from the books of the partnership after inspecting and inventorying the property. The figures arrived at by the appraisers were used by the petitioner in her return for the estate.
Representatives of the estate of William Moore and of Jacob S. McFerren, who owned the other half interest in the partnership, and, after he died on January 7, 1923, made continued and persistent attempts to dispose of the partnership assets. They were able to sell certain of the timber for $125,000 in 1925 and the remainder of the plantation and timberland in Arkansas for $300,000 in 1926. Prior to that time the box factory and machinery was dismantled and sold for a total of $25,947.27, the inventory consisting of boxes, etc., sold for $27,823.31, the Luxora personalty sold for $21,223.50, Island No. 26 was sold for $45,000 and bonds of the H.O. Company were sold for $135,000.
The Mississippi County land was drained by drainage ditches 12 to 20 feet wide at the top, 7 to 8 feet wide at the bottom and*3177 as much as 10 feet deep. The drainage system was inadequate to drain the land. A considerable portion of the land was swampy and inadequately drained. The plantation did not raise a paying crop after the death of Moore until 1925. There was no sale for real estate such as the Arkansas plantation in 1923, 1924, or 1925.
On April 10, 1922, the partnership of Moore & McFerren paid the collector of Mississippi County, Arkansas, 1921 real estate and personal taxes of $22,525.97.
Some of the assets of the partnership of Moore & McFerren were still unliquidated at the time of the hearing.
On April 29, 1921, William Moore made a financial statement in which he listed his one-half interest in Moore & McFerren as having a net value of $391,645.76.
OPINION.
SIEFKIN: The petitioner in this proceeding seeks to prove that the values assigned by her to certain items of her return for the estate of William Moore were inflated values. The only facts apparently not known to the disinterested and experienced appraisers whose values were the basis of the return at the time the return was filed, were (1) how long the farm depression in that vicinity would last and (2) that the drainage*3178 was inadequate. As late as 1924 at least one of the same appraisers had the same opinion as to the value of the Mississippi County property. We are unable to find what effect those two facts should have upon the values fixed by the appraisers and adopted by the respondent or that they should have any effect. *867 From the evidence it appears that they obtained the best information available as to the values as near the date of the decedent's death as possible, and brought to bear their own best judgment. The evidence of the sale prices of various portions of the partnership assets several years subsequent to the basic date for valuation is too remote to permit us to disturb the valuations placed upon the property near the date of death. The result is to approve the respondent's determination of the value of the gross estate. The deductions allowed by the respondent from the gross estate should be increased by one-half of $22,525.97 on account of a liability for state taxes which had accrued at the time of Moore's death against the partnership.
Judgment will be entered under Rule 50.