This proceeding is for the redetermination of a deficiency in the Federal estate tax liability of the estate of Charles H. Thieriot, deceased, in the amount of $22,947.49. Petitioners claim an overpayment in the amount of $6,821.21.
The notice of deficiency was dated March 26, 1945.
Three questions are raised by the pleadings:
1. Were the proceeds of a certain policy of life insurance, issued on the life of the decedent by the Aetna Life Insurance Co., includible in the gross estate of the decedent, pursuant to the provisions of section 811 (g) of the Internal Revenue Code?
2. Was the value of a certain life insurance policy, issued on the life of the decedent by the Aetna Life Insurance Co., includible in the gross estate of the decedent pursuant to the provisions of section 811 (c) of the Internal Revenue Code as a transfer intended to take effect in possession or enjoyment at or after death?
3. Was the Commissioner estopped from asserting the deficiency herein?
The case was submitted on a stipulation of facts and documentary evidence admitted at the hearing.
FINDINGS OF FACT.
Charles H. Thieriot, the decedent herein, and hereinafter referred to as such, a resident of Nassau County, Long Island, New York, died testate at 2:30 o'clock in the morning of January 10, 1941. His will was proved and admitted for administration in the Surrogate's Court of Nassau County on January 22, 1941. He was survived by his wife, Frances T. Thieriot, and two children, Charles H. Thieriot, Jr., and Lucille Thornton Thieriot Walker.
The petitioners were appointed executors under the last will and testament of Charles H. Thieriot, deceased, qualified as such, and have since January 22, 1941, been acting as such executors. They filed the said estate tax return for the estate of Charles H. Thieriot with the collector of internal revenue for the first district of New York on April 10, 1942.
On January 9, 1922, the Aetna Life Insurance Co. issued a policy of life insurance, No. N 308890, upon the life of the decedent in the sum of $100,000. All premiums on this policy were paid by the decedent.
As originally drawn the policy provided that the sum payable upon the death of the decedent should be paid to Frances T. Thieriot, wife of the insured, if she survived the insured, otherwise to the executors, administrators, or assigns of the insured.
The policy provided for two types of beneficiaries, a so-called "death beneficiary" and a "life beneficiary." The death beneficiary was nt of $69,210.54 as a dividend from Forcum-James Company, a Tennessee corporation," and in his statement of facts in his petition alleged that "Petitioner did not receive any dividend whatever from Forcum-James Company during the year 1941." The respondent denies such allegation of error and fact.
There is no evidence or testimony on this issue except the categorical statements of C. B. Ford and Vern Forcum that neither received any dividend from the Forcum-James Co. during 1941. Such testimony represents the conclusion of each witness as to the ultimate conclusion of fact that this Court is called upon to make. The petitioners did not deny in their pleadings, nor offer any proof nor argument, that the $500,000 was actually received by the partnership from the Forcum-James Co., as determined by respondent, but only denied that it was received in the character of a dividend. In view of the fact that there are no evidentiary facts of record upon which we can make any findings or reach any conclusion on this issue contrary to the respondent's determination, we sustain such determination. Cf. Forcum-James Co., 7 T.C. 1195.
Decision will be entered under Rule 50.
SEC. 23. DEDUCTIONS FROM GROSS INCOME.
In computing net income there shall be allowed as deductions:
(a) EXPENSES. —
(1) IN GENERAL. — All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including a reasonable allowance for salaries or other compensation for personal services actually rendered; * * *
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(p) PENSION TRUSTS. —
(1) GENERAL RULE. — An employer establishing or maintaining a pension trust to provide for the payment of reasonable pensions to his employees shall be allowed as a deduction (in addition to the contributions to such trust during the taxable year to cover the pension liability accruing during the year, allowed as a deduction under subsection (a) of this section) a reasonable amount transferred or paid into such trust during the taxable year in excess of such contributions, but only if such amount (1) has not theretofore been allowable as a deduction, and (2) is apportioned in equal parts over a period of ten consecutive years beginning with the year in which the transfer or payment is made.
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(3) EXEMPTION OF TRUSTS UNDER SECTION 165. — The provisions of paragraphs (1) and (2) of this subsection shall be subject to the qualification that the deduction under either paragraph shall be allowable only with respect to a taxable year (whether the year of the transfer or payment or a subsequent year) of the employer ending within or with a taxable year of the trust with respect to which the trust is exempt from tax under section 165.