Opinion
February 19, 1926.
Curtis, Mallet-Prevost, Colt Mosle, for the executor.
Chas. A. Curtin, for the Tax Commission.
The application to fix the transfer tax is granted. The decedent at the time of her death, February 13, 1910, was the owner of a vested remainder created by the will of Sarah H. Willard, subject to the life estate of Harriet Willard, who survived decedent. This asset was not included in the appraisal of decedent's estate. Her executor received the value of her interest on December 7, 1925, after the death of the life tenant.
The provisions of the Tax Law regulating the taxation of life estates and remainders refer to such interests when and as created by the will of the decedent whose estate is being appraised. They have no application to the valuation of decedent's interest in the estate of another person. What was a vested remainder in the estate of Sarah H. Willard has become, through the death of the life tenant, Harriet Willard, a simple asset in the estate of decedent. The rule covering its valuation for the purposes of the transfer tax is found in the general rule set forth in section 220 Tax of the Tax Law which provides that the tax shall be imposed upon the "clear market value." That value is to be determined as of the date of decedent's death, which is the date of the accrual of the tax. ( Matter of Penfold, 216 N.Y. 163.)
When the value of the asset cannot be fixed with reasonable accuracy at the time of the appraisal, the value when ascertained is subject to such adjustment as to make it applicable to the date of the decedent's death. ( Matter of Hubbard, 234 N.Y. 175, 180, 181.)
The spirit, if not the letter, of the latter decision will be followed and a fair adjustment worked out in the appraisal if the sum received by the executor of decedent be discounted at six per cent per annum for the period between its accrual and payment.
In view of the circumstances here disclosed, the penalty on the transfer tax will be remitted from ten per cent to six per cent from the date of the decedent's death to the date of payment, provided such payment be made within ten days from the entry of the order. Submit order in accordance with this decision.