*3552 1. Various questions of fact relative to the fair values of assets are determined upon the evidence; where satisfactory evidence is lacking, respondent is sustained.
2. Deductions held allowable from the gross estate of executrices' commissions duly allowed by the court and actually paid, and also the amount of an indebtedness overlooked in preparing the return.
*396 This proceeding results from the determination of a deficiency in estate tax amounting to $8,872.99.
Petitioners allege error with reference to the following issues: (1) Excessive values placed upon the real estate, stocks and bonds, mortgages, notes, cash, and insurance, and other miscellaneous property; (2) disallowance of the deduction of executrices' fees in the amount of $12,314.70; (3) disallowance of the deduction of attorney's fees in the amount of $3,000, and of administration expenses in the amount of $300; (4) failure to allow a deduction from the gross estate of decedent's promissory note amounting to $21,483.80, held by the Lincoln-Alliance Bank. The fourth issue was*3553 raised in an amended petition filed upon motion duly made and granted.
FINDINGS OF FACT.
Decedent died on October 5, 1923, at Rochester, N.Y., leaving a will signed on February 14, 1921, nominating his wife, Margaret I. Hunt, and his three daughters, Ethel P. Hunt, Lois Hunt Cross, and Hazel Hunt Ward, executrices. The preliminary report of the executrices *397 to the surrogate's court was filed April 25, 1924, and their final report was filed on January 20, 1926. The final report was approved by the court on the same day. Commissions amounting to $12,314.70 have been allowed to the executrices by the court and they have received payment thereof in full.
In the return a value amounting to $120,000 was reported for a six-story box factory, brick, semi-fireproof building, having 50,000 square feet of floor space, located at the northwest corner of Mill and Commercial Streets, Rochester, N.Y. The building was 35 years old. The lot had a frontage of about 87 feet and a depth of about 99 feet. On May 1, 1920, a building used for manufacturing, not quite as strongly constructed as decedent's building, located on St. Paul Street about 2,000 feet from decedent's building*3554 on a lot having 74 feet front and 138 feet depth, the building having 37,000 square feet of floor space, sold for $40,000. In October, 1919, a two-story and basement building, located less favorably on Lyell Avenue, having about 36,600 square feet of floor space, sold for $45,000. The lot had a frontage of 119 feet and a depth of nearly 200 feet.
In the return a value amounting to $40,000 was reported for a residence and land belonging to decedent located at 1040 Lake Avenue, Rochester, N.Y. The land had a frontage of 120 feet. Shortly prior to the death of decedent, a smaller residence located on a parallel street east of decedent's residence but in the same general locality sold for less than $15,000. A residence property located at 1340 Lake Avenue, the land fronting 174 feet on the Avenue, the residence being the same kind of a building as decedent's residence, sold for $55,000. An offer was made to the executrices for the residence of decedent, amounting to $25,000, which offer was declined.
In the return a value amounting to $2,100 was reported for 10 shares of Lincoln-Alliance bank stock. Respondent has added to the gross estate an additional value of $700 for this*3555 stock and, also, has added a value amounting to $4,760 for 17 additional shares of the same stock, resulting in a valuation amounting to $7,560 for the 27 shares. The stock was listed on the Rochester market. On October 5, 1923, a bid price of $260 was offered. There were no "asked" prices. No sales were made. The par value of the stock was $100. Under date of September 10, 1923, the Lincoln-Alliance Bank published a statement of condition showing capital $2,000,000, surplus $2,000,000, and undivided profits, $980,145.57, or an aggregate of $4,980,145.57.
In the return shares of capital stock of the Eastman Kodak Co. were reported and valued as follows: 2010 shares of common, $211,050; 108 shares of preferred, $11,664. These values have been revised by respondent to the following amounts: for the common, *398 $216,326.25; for the preferred, $11,718. On October 5, 1923, the common stock was quoted on the New York stock exchange at a bid price of 106 and asked price of 106 3/8.
In the return 500 shares of preferred stock of the Alderman-Fairchild Co. were reported at fair value amounting to $40,000. Respondent has revised this valuation to an amount of $50,000, *3556 and in addition has added to the gross estate a valuation amounting to $44,000 for 440 shares of common stock of the same company which were not reported in the return. Eighty per cent of the outstanding stock of this corporation was owned by two stockholders other than decedent. There were no sales of the stock about October, 1923.
In 1923 business was not good due to a general depression. The net profits of Alderman-Fairchild Co. for 1923 amounted to $27,273.11; for 1922, the loss amounted to $16,196.86. In 1923, dividends were declared on the preferred stock. The balance sheet of the corporation dated December 31, 1923, showed capital stock, common, $250,000; preferred, $91,500; and surplus, $54,026.07, or an aggregate of $395,526.07.
In the return 250 shares of stock of the Commercial Paper Box Co. were reported at no value, indicated by the designation "nominal." Respondent has valued the stock in the amount of $25,000. Two-thirds of the outstanding stock was owned by two stockholders other than decedent. This corporation sustained losses as follows: in 1922, $10,779.91; in 1923, $4,612.18. No dividends were paid in 1923. The balance sheet of the corporation dated*3557 December 31, 1923, showed capital stock issued, $40,000; deficit, $4,336.40.
In the return no taxable value was reported for life insurance. Respondent has added to the gross estate, "insurance payable to estate," $24,058.68. The amount actually received for life insurance was $22,058.68.
In the return a value amounting to $1,300 was reported for indebtedness of John Ward and wife to decedent secured by mortgage. Respondent has added to the gross estate a value amounting to $1,820.58 for "note and mortgage Mrs. Mulvani on premises at 134 Fulton Avenue, Rochester, New York." There was but one mortgage - that of Ward and wife. The principal amounted to $1,300, and is unpaid. The payments of the interest have been made.
In the return an aggregate value amounting to $51,000 was reported for two notes of M. B. Shantz, Inc., each for $42,500, both dated January 3, 1923 - one due January 3, 1925, the other due January 3, 1926. For the open account of $10,187.50 due from the same debtor, the return reported a value amounting to $6,000. Respondent has revised the valuations to the following amounts: for the two notes, $52,658.54; for the open account $7,467.44. M. B. Shantz, *3558 Inc., went into bankruptcy in February, 1924.
*399 In the return deductions for debts were claimed and the amounts thereof were revised and allowed by respondent as follows:
| Claimed | Allowed | |
| Allowances of approximately 40% guarantees for | ||
| obligations of M. B. Shantz, Inc.: | ||
| Account with John B. Pike ($9,436.50) | $3,774.60 | |
| Account with Whithouse-Davis Co. ($13,567.61) | 5,427.04 | |
| Notes at Traders National Bank ($63,726.31) | 25,490.52 | |
| Total | 34,692.16 | 29,558.28 |
In the return no deduction was claimed of the amount of a promissory note of decedent payable upon demand in the principal amount of $21,365.10 with interest at the rate of 5 per cent per annum held by the Lincoln-Alliance Bank, Rochester, N.Y. The note was paid off on November 9, 1923, by the executrices. At date of death of decedent the interest on the principal had been paid to October 1, 1923.
OPINION.
LOVE: This is an appeal relating to an estate tax. The issues present numerous questions purely of fact. The evidence for the most part is so meager as to preclude a revision of many of the items contended for by petitioners. In order to reflect the situation clearly we have*3559 included in the findings, in some instances, facts which appear to be of rather attenuated relevancy. In some of the questions petitioners are claiming error not on the part of respondent but in their original return filed for estate-tax purposes.
The first issue includes a number of questions of the fair values of assets included in the gross estate.
A factory building located at Mill and Commercial Streets, Rochester, N.Y., was valued in the return at $120,000. Petitioners now contend that the value was $65,000. A residence property located on Lake Avenue, Rochester, N.Y., was valued in the return at $40,000. Petitioners now contend that the value was $30,000. The amounts of the values now claimed rest upon the opinion of a single valuation witness. We are not satisfied that his valuations are more than retrospective appraisals made without knowledge of the properties as they existed on the date of the death of decedent. The comparative sales offered in evidence are remote in point of time, and deficient in comparative details. We can not revise the valuations reported in the return, and hence approve the action of the Commissioner as to those two items.
A value*3560 of $210 per share for 10 shares of the capital stock of the Lincoln-Alliance Bank, of Rochester, N.Y., was reported in the return. Respondent has increased the total number of share to 27, *400 and has valued the shares at $280 each. Petitioners do not deny holding the number of shares determined by respondent but they claim the value of the stock was $260 per share. From the evidence we believe the fair value was $280 per share. Respondent is sustained on that item.
A value of $105 per share for 2,010 shares of common stock of the Eastman Kodak Co. was reported in the return. Respondent has increased the value to a price per share in excess of $107. On the New York Stock Exchange the prices for the stock were reported at $106 bid, and $106 3/8 asked. We think the stock did not have a value in excess of $106 3/8 and hold that respondent's valuation should be revised to $106 3/8.
A value of $80 per share for 500 shares preferred stock of the Alderman-Fairchild Co. was reported in the return. Respondent has valued this stock at $100 per share, and in addition has added to the gross estate 440 shares of the common stock of the same company, also at $100 per share. *3561 Petitioners do not deny holding the additional 440 shares which were not reported in the return, but they claim the stock should be valued at $70 per share for the preferred and $10 per share for the common. In our opinion there is no basis for such low valuations of the stocks, and for want of sufficient evidence to justify any other value, the determination of the Commissioner as to that issue is approved.
With reference to the value of 250 shares of the capital stock of the Commercial Paper Box Co. reported in the return without value, and valued by respondent at $25,000, respondent is sustained for lack of evidence of any determinable amount.
The respondent has included in the gross estate, life insurance payable to the estate in the amount of $24,058.68. The actual amount of insurance received by the executrices was $22,058.68. No greater value than $22,058.68 should be included in the gross estate in respect of this insurance.
It is in evidence and uncontroverted that a fair value of $1,300 was correctly reported in the return for the indebtedness of John Ward and wife secured by mortgage on what was sometimes referred to as the "Mulvani" property, and respondent*3562 has added to the gross estate a value of $1,820.58 attributed to a "Mulvani note and mortgage," which is the same as the Ward indebtedness, and therefore the $1,820.58 should be eliminated from the gross estate.
One question remains under the first issue. It relates to a corporation known as M. B. Shantz, Inc., which went into bankruptcy a few months after the death of decedent. The corporation was indebted to decedent on two promissory notes and, also, on open account. Decedent was liable under his guarantees of certain obligations of the corporation. The items are set out in the findings. After the elimination *401 of confusing details, the contentions of petitioners are found to amount to this, that the indebtedness of the corporation to decedent was valued by respondent in the amount of $60,125.98; that the estate actually received $62,632.53; that the respondent deducted from the gross estate an aggregate of $7,684.61 attributable to the guarantees of the accounts of the corporation with Pike and the Whithouse-Davis Co.; that the payments by the estate actually aggregated $14,550.56; that giving effect to these subsequent transactions, the amount of this item was*3563 overstated in the amount of $4,359.40.
Even though we were disposed to give effect to the subsequent transactions, we would be unable to do so. There is no evidence of the facts and we have only statements and contentions of counsel. We can not predicate a reversal of the determination of the Commissioner on such a record. Therefore on that issue the Commissioner is sustained.
The second issue relates to the amount of executrices' commissions allowable as a deduction from the gross estate. Respondent does not contest the right to the deduction. It is in evidence and uncontroverted that commissions in the amount of $12,314.70 have been allowed by the probate court and actually paid to the executrices. A deduction in that amount should be allowed.
The third issue was abandoned by petitioners.
The fourth issue relates to the deduction from the gross estate of indebtedness of decedent amounting to $21,483.80 evidenced by a promissory note of decedent held by the Lincoln-Alliance Bank. The note is in evidence. It was paid in full by the estate on November 9, 1923. The deduction was overlooked in preparing the return and has not been allowed by respondent. It being a*3564 valid obligation of decedent properly deductible, it follows that the amount of that note, $21,483.80, plus interest to date of death of decedent, should be allowed as a deduction from gross estate.
Judgment will be entered under Rule 50.