Estate of Haase's, 75-815

Citation81 Wis.2d 705,260 N.W.2d 809
Decision Date03 January 1978
Docket NumberNo. 75-815,75-815
PartiesIn the Matter of the ESTATE of Oscar R. HAASE, a/k/a Oscar Rudolph Haase, Deceased. STATE of Wisconsin, Appellant, v. MARINE NATIONAL EXCHANGE BANK OF MILWAUKEE, Personal Representative of the Estate, Respondent.
CourtWisconsin Supreme Court

Bronson C. La Follette, Atty. Gen., and John E. Armstrong, Asst. Atty. Gen., on brief for appellant.

Thomas G. Travers and Tomlinson, Gillman & Travers, S. C., Madison, on brief for respondent.

DAY, Justice.

This is an appeal from an amended order determining inheritance taxes in the estate of Oscar R. Haase (hereafter estate). The estate claimed inheritance tax administrative expense deductions of $15,096.08 paid out in brokerage commissions in the sale of real estate and stock and other miscellaneous disbursements such as title policies and abstract fees connected with those sales.

The estate also used the $15,096.08 as a reduction or setoff on the fiduciary income tax returns of the estate to reduce the amount of capital gains realized on the sale. The parties agree that the issue here is whether these sales expenses may be claimed as administrative expense deductions for inheritance tax purposes when they have already been used as a setoff to reduce the amount of capital gains tax due on the fiduciary income tax returns. The trial court decided that the sales expenses could be used for both purposes. The Wisconsin Department of Revenue (hereafter department) appealed from that determination.

The statute in question is 72.015, Stats. (1969) which is part of the Wisconsin Inheritance Tax Act. It reads as follows:

"72.015 Deductions. Deductions for the following expenditures made by the personal representative shall be allowed to the estate subject to probate:

" * * *Ded

"(3) Expenses of administration, but only to the extent not claimed for income tax purposes . . . ." 1

We conclude that under the wording of the statute these expenses incurred by the personal representative were administrative expenses claimed for income tax purposes and they could not also be used as a deduction on the inheritance tax return. Therefore we reverse the trial court.

The estate claims that it should be allowed to deduct the sales expenses as administrative expenses on the inheritance tax return. It cites as authority Commissioner of Internal Revenue v. Estate of Bray, 396 F.2d 452 (6th Cir. 1968). The estate argues that a federal interpretation of federal statutes is persuasive because the Wisconsin income tax laws were "federalized" under §§ 74 a, b, through 74 e, f, Ch. 163, Laws of 1965. This court has also stated that where the Wisconsin statutes are similar to the federal provisions, the interpretation of the federal courts should be given considerable weight. Estate of Kersten, 71 Wis.2d 757, 763, 239 N.W.2d 86 (1975).

In Estate of Bray, the estate sold stocks to pay administrative expenses and taxes and took an inheritance tax deduction for the administrative expense incurred in the sale of the stock, pursuant to 26 U.S.C.A. § 2053. 2 According to 26 U.S.C.A. § 642(g), 3 amounts that were deducted as inheritance tax administrative expenses could not also be deducted against the income of the estate. The tax court interpreted 26 U.S.C.A. § 642(g) as allowing the deduction in both taxes. Bray at 46 T.C. 577. The circuit court of appeals affirmed the tax court without opinion relying on the reasons given by the tax court. The tax court reasoned that there was a distinction between the setoff of sales expenses against capital gains and a true deduction.

"The statute does not prohibit taking what is a setoff against selling price and not a true deduction in the income tax return and using the same item to reduce the estate in the estate tax return." Bray at 46 T.C. 582.

This same distinction between a deduction and a setoff was made in Commerce Trust Company v. United States, 438 F.2d 111 (8th Cir. 1971) and cases cited therein.

The effect of the Bray case was changed by P.L. 94-455, Sec. 2009(d), 90 Stats. 1896, amending 26 U.S.C.A. § 642(g). The amendment took effect in 1976 and reads as follows:

". . . (g) Disallowances Of Double Deductions. Amounts allowable under section 2053 or 2054 as a deduction in computing the taxable estate of a decedent shall not be allowed as a deduction (or as an offset against the sales price of property in determining gain or loss) in computing the taxable income of the estate or of any other person . . . "

We are not persuaded by the reasoning of the Bray case. While both parties to this appeal cite conflicting rules on statutory...

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3 cases
  • Kelley Co., Inc. v. Marquardt
    • United States
    • Wisconsin Court of Appeals
    • December 3, 1991
    ...its interpretation, assuming that the federal and state laws in pregnancy discrimination are equivalent. See In re Estate of Haase, 81 Wis.2d 705, 707, 260 N.W.2d 809, 811 (1978) (when federal and Wisconsin statutes are similar, the interpretations of federal courts of federal laws should b......
  • State v. Brady
    • United States
    • Wisconsin Court of Appeals
    • February 24, 1984
    ...persuasive guides to the construction of state law when the state and federal provisions are similar, In Matter of Estate of Haase, 81 Wis.2d 705, 707, 260 N.W.2d 809, 811 (1978), but the federal courts differ on the meaning of "criminal proceeding," United States v. Thompson, 319 F.2d 665,......
  • State v. Beck
    • United States
    • Wisconsin Court of Appeals
    • June 19, 1986
    ...are similar to federal statutes, the interpretations of federal courts are given considerable weight. In Matter of Estate of Haase, 81 Wis.2d 705, 707, 260 N.W.2d 809, 811 (1978). The Court in United States v. Pomponio, 429 U.S. 10, 12 (1976) interpreted 'willful' in the federal tax code no......

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