Opinion
April 21, 1926.
Davis, Polk, Wardwell, Gardiner Reed [ Russel S. Coutant of counsel], for the executors.
Charles A. Curtin, for the State Tax Commission.
This appeal is taken by the executors from the order fixing the transfer tax on the ground that certain real property over which decedent exercised a power of appointment was appraised in excess of its market value, in that no allowance or deduction was made for the fact that the appointed property was a fractional interest.
The father of the decedent was the owner of the entire parcel. Under his will the decedent was given the income from one-sixth of the real property with power of appointment over that share.
The appeal must be denied. The decedent was not the owner of an undivided one-sixth interest in the realty. If he had been, Matter of Gibert ( 176 A.D. 850), relied on by the appellants, might apply, in view of the testimony of the real estate expert that a fractional interest was worth less than the proportionate value of the whole. The actual transfer was initiated by the will of decedent's father, the donor of the power. ( Matter of Delano, 176 N.Y. 486; affd., sub nom. Chanler v. Kelsey, 205 U.S. 466; Matter of Dows, 167 N.Y. 227; Matter of Vanderbilt, 50 A.D. 246; affd., 163 N.Y. 597.) The provision of section 220, subdivision 6, of the Tax Law, that the appointed property shall be deemed to belong to the donee, does not change the character of the ownership. ( Matter of Canda, 197 A.D. 597; Matter of Palmer, FOLEY, S., 127 Misc. 782.) The distinction which must be made is that while the tax is levied upon the transfer of the property affected by the exercise of the power of appointment, the status of the property and character of its ownership as far as these elements enter into the evaluating of the same should be taken as of the time of the granting of the power and the passing of the property from the hands of the donor. The order fixing tax is affirmed.
Now Tax Law, § 220, subd. 4, as amd. and revised by Laws of 1925, chap 143. — [REP.