Sanderson v. Commissioner of Internal Revenue

• Decision Date: 14 November 1929
• Docket Number: Docket No. 28979.
• Citation: 18 BTA 221
• Parties: BENJAMIN B. SANDERSON, EXECUTOR UNDER THE WILL OF MARGARETTA A. LIBBY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
• Court: U.S. Board of Tax Appeals

18 B.T.A. 221 (1929)

BENJAMIN B. SANDERSON, EXECUTOR UNDER THE WILL OF MARGARETTA A. LIBBY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket No. 28979.

Board of Tax Appeals.

Promulgated November 14, 1929.

Benjamin B. Sanderson, Esq., pro se.

L. S. Pendleton, Esq., for the respondent.

The Commissioner asserted a deficiency in Federal estate tax in the amount of $3,941.69 against the estate of Margaretta A. Libby, deceased. The petitioner, as executor of the estate, brings this proceeding for a redetermination of the tax liability of said estate. The petition alleges error in several counts, the substance of all of which is that the respondent erred in refusing to allow as a deduction, in computing the net estate, certain bequests to charitable and religious corporations.

FINDINGS OF FACT.

Margaretta A. Libby died August 14, 1923, leaving a will which was duly admitted to probate, and under which the petitioner was named executor and was duly appointed and qualified as such by the probate court for the County of Cumberland in the State of Maine.

The will of the decedent and a codicil thereto which was allowed and probated as a part of the will provide as follows:

I, Margaretta A. Libby of Portland, in the County of Cumberland and State of Maine, do make, publish and declare this my Last Will and Testament, hereby revoking all wills heretofore made by me.

FIRST: I direct my Executor hereinafter named to pay all of my just debts and funeral charges as soon as may be after my decease.

SECOND: I give, devise and bequeath all the estate, real, personal and mixed, of which I shall be seized or possessed or to which I shall be in any way entitled at my decease to my beloved sister, Ellen H. Libby of said Portland, for the term of her life to use the same and the income therefrom and so much of the principal thereof as she may desire for her needs and comfort.

THIRD: Upon the decease of my said sister, or in case she shall predecease me, then forthwith upon my decease I give and bequeath the sum of Five Thousand Dollars ($5,000.) in trust to the State Street Congregational Church of Portland, Maine, the income therefrom to be used for the general maintenance and support of the Church; the sum of Five Thousand Dollars ($5,000.) in trust to the First Congregational Church of Black Point, Scarboro, Maine, the income therefrom to be devoted exclusively toward the support of its pastor; the sum of Five Thousand Dollars ($5,000.) to the Maine General Hospital of Portland, Maine, for such use as the Trustees thereof may see fit; the sum of Five Thousand Dollars ($5,000.) to the Young Women's Christian Association of Portland, Maine; the sum of Two Thousand Dollars ($2,000.) to The State Young Men's Christian Association of Maine; the sum of Two Thousand Dollars ($2,000.) to the Mary Brown Home of Portland, Maine; the sum of Two Thousand Dollars ($2,000.) to the Home for Aged Women of Portland, Maine; the sum of Two Thousand Dollars ($2,000.) to the Female Orphan Asylum of Portland, Maine; the sum of Two Thousand Dollars ($2,000.) to the Home for Aged Men of Portland, Maine; and the sum of One Thousand Dollars ($1,000.) to the Bible Society of Maine.

I give and bequeath the sum of Seventy-five Hundred Dollars ($7,500.) to Dr. John F. Thompson of said Portland and his heirs; and the sum of Seventy-five Hundred Dollars ($7,500.) to John C. Woods of Scarboro, Maine, and his heirs.

I further give and bequeath to each of the following named persons who shall be living at the decease of my said sister, or in case she shall predecease me then such as shall be living at my decease, as follows, to wit: the sum of Twenty-five Hundred Dollars ($2,500.) to Ephraim Schoppe of said Scarboro; the sum of Twenty-five Hundred Dollars ($2,500.) to Minnie Berry of said Portland; and the sum of Twenty-five Hundred Dollars ($2,500.) to Mattie Sanborn of said Portland.

FOURTH: I further direct subject to the use and any disposition made by my sister that my Executor, bearing in mind any written requests which I may leave pertaining thereto, shall make such distribution of my personal belongings, household furniture and furnishings, carriages, horses, live stock, automobiles, farm implements and machinery as he shall deem wise and fair for the benefit of my estate and any of the persons interested therein.

FIFTH: All the rest, residue and remainder of my estate upon the decease of my said sister, or in case she shall predecease me, then upon my decease, and after the payment of the foregoing bequests, I give, devise and bequeath to my Trustee hereinafter named, and his successors, but in trust nevertheless for the uses and purposes following, that is, in trust to hold, manage and control the same with full power without authority from any Probate Court to sell, mortgage, lease, exchange, transfer and convey any of said property, real or personal, for the purpose of reinvestment and to invest the proceeds of any such sale or transfer in such securities as he deems wise with full power to vote any and all shares of stock, to collect rents, dividends, interest and profits arising from said property and to pay out of the same all proper taxes, assessments and other charges and expenses, including those for repairing and maintaining said real estate and all expenses and charges incident to said trust including a reasonable compensation for his services in the conduct and management thereof and to pay the net income therefrom and to distribute the principal thereof upon the conditions and provisions as follows, namely:

SIXTH: My said Trustee shall pay therefrom the sum of Four Thousand Dollars ($4,000.) annually in quarterly installments to Harrison J. Holt of said Portland during the term of his life and on his decease said income shall revert to my Trust Estate, and in lieu thereof I direct my Trustee then to pay to the children of the said Harrison J. Holt in equal shares the sum of Twenty-five Thousand Dollars ($25,000.), the issue of a deceased child to take by right to representation.

SEVENTH: My said Trustee shall pay likewise therefrom the sum of Four Thousand Dollars ($4,000.) annually in quarterly installments to William L. Holt of Beloit, Wisconsin, during the term of his life and on his decease said income shall revert to my Trust Estate, and in lieu thereof I direct my Trustee then to pay to the children of said William L. Holt in equal shares the sum of Twenty-Five Thousand Dollars ($25,000.), the issue of a deceased child to take by right of representation.

EIGHTH: I further direct my Trustee to pay the remainder of the net income from my Trust Estate, subject to the provisions of the Ninth Paragraph of this Will, annually in quarterly installments to the following named persons then living in equal shares for the term of their respective lives, to wit: Harrison J. Holt of said Portland, William L. Holt of said Beloit, Ernestine L. Bowman, Frances E. Lord, Nathalie Lord, and Agnes McC. Lord, all of said Medford, Massachusetts, Mary McDonald of Riverdale-on-Hudson, New York, Lillie W. Libby of New York City, and Harrison J. Libby of Hackensack, New Jersey, provided that on the decease of any one of the aforementioned persons her or his share of said income shall revert to my said Estate to augment the share of the income therefrom to be paid to the survivors or survivor of the aforementioned persons named in this Eight Paragraph of this Will and provided further that if it is the wish of the said Ernestine L. Bowman, Frances E. Lord, Nathalie Lord and Agnes McC. Lord, or any of them, to occupy the Farm at said Scarboro, known as Oakwood Farm, I direct my Trustee to permit the said Ernestine L. Bowman, Frances E. Lord, Nathalie Lord, and Agnes McC. Lord, or any of them, (so far as my interest therein conveyed to my Trustee is concerned) to occupy the said premises for the term of their lives or the life of the survivor of them free of any taxes or rental charges. In such case my Trustee shall retain the property during the period of such occupancy and shall pay the taxes on the same and all other charges incident to the proper maintenance and repair of the buildings thereon.

NINTH: Upon the decease of the said Ernestine L. Bowman, Frances E. Lord, Nathalie Lord, Agnes McC. Lord, Mary McDonald, Lillie W. Libby and Harrison J. Libby, I direct my Trustee to pay the following additional bequests, namely: The sum of Fifteen Thousand Dollars ($15,000.) absolutely to the Maine General Hospital of Portland, Maine, for such use by the Trustees thereof as they may see fit; the sum of Fifteen Thousand Dollars ($15,000.) to The State Street Congregational Church of Portland, Maine, in trust one-half of the income therefrom to be used for the general maintenance and support of the Church and the remaining one-half of the income to be used and distributed for the support of Home and Foreign Missions and for such other benevolent purposes as the Church authorities administering the fund may see fit; the sum of Ten Thousand Dollars ($10,000.) to the Young Women's Christian Association of Portland, Maine; the sum of Five Thousand Dollars ($5,000.) to the Mary Brown Home of Portland, Maine; the sum of Five Thousand Dollars ($5,000.) to the Home for Aged Women of Portland, Maine; the sum of Five Thousand Dollars ($5,000.) to The Home for Aged Men of Portland, Maine; the sum of Five Thousand Dollars ($5,000.) to the State Young Men's Christian Association of Maine; the sum of Five Thousand Dollars ($5,000.) to the First Congregational Church of Black Point, Scarboro, Maine; and the sum of Twenty-five Hundred Dollars ($2,500.) to The Female Orphan Asylum of Portland, Maine.

TENTH: I direct that all bequests hereinbefore made shall be free from all inheritance taxes and that such taxes shall be paid out of my Estate.

ELEVENTH: On the decease of both the said Harrison J. Holt and William L. Holt and the said Ernestine L....