Rogers v. Commissioner

NOAH C. ROGERS, EXECUTOR, ESTATE OF WILLIAM A. DELL, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Rogers v. Commissioner
Docket No. 25964.
United States Board of Tax Appeals
17 B.T.A. 570; 1929 BTA LEXIS 2285;
September 26, 1929, Promulgated

*2285 The decedent was a resident of the United States at the time of his death.

Raymond M. White, Esq., for the petitioner.
Lewis S. Pendleton, Esq., for the respondent.

LOVE

*570 This proceeding involves a deficiency in estate tax determined by the respondent in the amount of $800.65. The petitioner alleges error in the respondent's denial of a specific exemption of $50,000 from the gross estate, upon the theory that the decedent was a nonresident. The petitioner further alleges that the tax has been overpaid in the amount of $524.51.

FINDINGS OF FACT.

The petitioner, a resident of the Borough of Manhattan, City and State of New York, is the executor under the last will and testament of William A. Dell, deceased, having been duly appointed by the Surrogate's Court of New York County.

In 1891 the decedent, Dell, was residing and was engaged in business at Jacksonville, Fla. He continued to reside at Jacksonville *571 until 1904, when, because of ill health of his wife, he moved to Morristown, N.J.

Mrs. Dell had considerable means and the family residence at Morristown was her property. During winters of the latter years of*2286 their residence at Morristown they engaged a furnished cottage at Saranac Lake, N.Y., where Mrs. Dell could have the benefit of the climate and the attention of specialists. Their home at Morristown was maintained and their voting residence there continued during such periods.

About 1916 the Morristown residence was sold and the decedent and his wife went to the upper Alps in Switzerland, where, at Majola, and at Davos, the climate was particularly favorable to Mrs. Dell's ailment. In July, 1917, Mrs. Dell died at St. Moritz.

Shortly after his wife's death Dell returned to the United States and for some time he resided with a married son in New York City. Upon his wife's death he became possessed of a considerable fortune and continued thereafter to have a large income. Early in 1918 he moved to the Hotel Plaza, 58th Street and Fifth Avenue, New York City.

The manager of the Plaza had been a friend of Dell's at Jacksonville for many years, and, so far as possible, he endeavored to create a homelike atmosphere for Dell about the hotel. His accommodations at the Plaza consisted of one large room and bath. He spent the spring of 1918 at the hotel.

Dell was an enthusiastic*2287 golfer. At Morristown he had been a member of the Morristown Club, the Morristown County Gold Club and the Baltusrol Gold Club. Rheumatic attacks tempered his game, however, and it appears that much of his travel subsequent to Mrs. Dell's death was in search of relief from his ailment and of good golf.

During June and July, 1918, Dell was in the Berkshires, at Stock-bridge, Mass., and in August he was at Manchester, Vt. From September, 1918, until August, 1919, he remained at the Plaza. In August, 1919, he went to Mangolia, Mass. From the latter part of August, 1919, until early in December of the same year, he was at the Plaza.

In December, 1919, Dell went to Europe. He spent some time in Switzerland and in February, 1920, he was at Cannes, France. For some time thereafter he traveled in Switzerland and Southern France, mostly between resorts where climatic conditions and mineral waters were favorable to his physical condition.

About March, 1920, he purchased a small house known as "Villa Ilona," at Cagnes. Dell's income at that time was about $30,000 a year. The purchase price of Villa Ilona was less than $10,000 *572 at the existing exchange rate and interest*2288 on the amount of his investment in the property would have been about $600 per year.

Dell had always patronized the more expensive hotels when he traveled. He could, therefore, live more cheaply at Villa Ilona. In addition, his property there was on the edge of a gold course, whereas the nearest courses to resorts such as Cannes or Nice, were several miles away. His rheumatic condition seldom became such that he could not at least practice putting every day. The Villa Ilona was in no way comparable in size or pretentiousness to Dell's former establishment at Morristown. During his absences the house was closed, no permanent servants being maintained.

Later in March, 1920, Dell went to Davos, Switzerland, and there married the daughter of his first wife's physician. They spent April, 1920, at Cannes. In August, 1920, they came to the United States and for several months lived at the Plaza. During this period he executed, in New York City, on November 1, 1920, his will, the preamble of which states:

I, William Dell, now residing at the Hotel Plaza, Fifty-Eighth Street and Fifth Avenue, New York City, and being a resident and citizen of the United States, do hereby make*2289 my Last Will and Testament as follows.

Because Dell insisted on inserting in his will provisions for bequests to the children of the present petitioner who was his attorney and business advisor, the petitioner declined to permit execution of the will in his offices or to take custody of its afterwards. Dell accordingly carried it with him.

In conversation with his attorney at that time Dell made it clear that he considered himself to be and desired to remain, a resident of New York.

Some time after November, 1920, Dell and his wife returned to Europe. They spent some of the winter months of 1920 and 1921 at Villa Ilona. From early in July, 1921, to the fall of 1921 they were in Switzerland and from the fall of 1921 until the spring of 1922 they were at Villa Ilona.

The summer months of 1922 Dell spent at various places in France and Switzerland. In the fall of 1922 he returned to Villa Ilona for the winter. In May, 1923, the second Mrs. Dell went to Switzerland and the decedent went to Aix les Bains for treatment of his rheumatism. Thereafter he traveled through Northern France. In July he was at Zurich and later at Davos. He spent most of the winter of 1923 at*2290 the Villa Ilona. During this time the health of his wife was not good.

Early in May, 1924, the decedent came to New York, where he remained at the Plaza until some time in July. Dell then went to Paris and later to Zurich and Ragos where he took rheumatic treatments. Some time thereafter Mrs. Dell had a nervous breakdown *573 and entered a sanitarium. The decedent went to Paris where until February, 1925, he stayed with a married son. Some time in February, 1925, Dell motored from Paris to the Villa Ilona. He died there suddenly on March 8, 1925. He was approximately 70 years of age at the time of his death.

The will executed by Dell in November, 1920, was found among his effects after his death. A brother of the second Mrs. Dell immediately deposited it with a notary for safe keeping. Under the laws of France a notary can not release custody of any document so intrusted to him without authority of a court order. The petitioner herein, as the executor named in Dell's will, brought appropriate proceedings through French counsel and on July 16, 1925, the court at Nice having jurisdiction of the matter directed the surrender of the will to the American Consul in*2291 order that it might be transmitted to the Surrogate's Court of New York County for probate. The will was admitted to probate in New York County on December 2, 1925.

At the time of his death all the decedent's income producing investments were American securities and all were in the custody of his attorney in New York. His securities had a value of upwards of $226,000; his bank balance at New York was $8,395.72. It appears that the decedent's only European property consisted of Villa Ilona, its furnishings and appurtenances and a balance in the amount of $2,064.26 in bank in France.

The decedent had two sons, one of whom was an instructor at Princeton University, and the other in the ministry at New York. The children of these sons were great favorites of the decedent. With the exception of his wife the persons mentioned were the petitioner's only close relative. It had long been the understanding of the decedent and his first wife that they desired to be buried at Jacksonville, which was the scene of their early married life, the place where their children were born and where a child who died in infancy was buried. The first Mrs. Dell was buried there. The decedent had*2292 informed his executor that he desired to be buried in the family plat at Jacksonville and his remains were brought to the United States and interred as he desired.

In his income-tax returns the decedent had always been described as a resident of the United States. His estate taxes paid to the Republic of France were paid on the basis of his being a resident of the United States. New York State inheritance taxes were paid on the same basis and his Federal estate-tax return was filed in that form. His passports likewise stated his residence to be in the United States.

The decedent was a resident of the United States at the time of his death, March 8, 1925.

*574 OPINION.

LOVE: The sole question for our consideration in this proceeding is whether or not the decedent was a resident of the United States at the time of his death. The primary factor on such an issue is the decedent's intention.

The respondent's position, it appears from the record and his brief, is that he having made a determination that the decedent was a nonresident at the time of death, the burden is upon the petitioner herein to overcome the prima facie correctness of that determination. So*2293 far we can agree. But while the respondent stresses the absence of direct written or oral declarations of the petitioner's intention to retain his American residence, he also objects to the admission of such declarations in evidence, when they do appear, as in the will, on the ground that they are self-serving. We believe, however, that the decedent's actions, considered in the light of his circumstances and with regard to what we consider his natural interests, indicate his intentions and constitute the best evidence of which the issue is by its nature susceptible. Moreover, the declaration in the will constitutes, as of the date of same, very weighty evidence of his intention.

Before the death of the Fifth Mrs. Dell she and the decedent had traveled extensively. Their home at Morristown had been disposed of. Upon her death he became possessed of large means. He had long been retired from business and was accustomed to travel. Golf was his hobby, but, like many others not so fortunately circumstanced, he found rheumatic attacks limited his enjoyment of the game. With his ample means we think it in no wise inconsistent with an intention to retain an American residence that*2294 he should roam the resorts and putting greens of first America and then Europe in search of comfort and golf. He did this, but, so far as the record reveals, he lost no American contacts thereby. His financial affairs were in the United States, his children and grandchildren were here, here were his old friends and counselors, and here he desired to be buried.

In 1920 he bought a small villa on the edge of a gold course at Cagnes, where he could step off his own property onto a putting green and where if his condition forbade play he could at least watch others do so. He married again and thereafter spent most of his winters at the villa. But before his second wife's health failed he brought her to New York, where he again lived at the Plaza. It was during this period that he executed his will and in it declared his residence as New York. His income-tax returns had long been filed on that basis.

*575 In 1924 he again came to New York and lived for a time at the Plaza. After his return to France the health of his wife and her mother failed and he lived for a time with a son who was then in Paris. He died suddenly at Cagnes in March, 1925.

*2295 We are of the opinion that the decedent did not by any action recounted exhibit an intention to abandon his American residence and that it was his intention to retain the same. We find therefore that he was a resident of the United States at the time of his death March 8, 1925. See .

The petitioner's contention that the tax has been overpaid is dependent upon computation of the tax due in event he is successful in this proceeding. We have no evidence upon this point. It appears, however, that the matter should be adjusted upon redetermination.

Judgment will be entered under Rule 50.