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Mr. McReady, as executor of decedent’s estate, decided to
refinance Bradley in order to distribute liquid assets to one of
the two heirs. Mr. McReady reasoned that Bradley was under a
long-term lease and that he would have to refinance the property
to remove equity to pay one of the beneficiaries her share in
liquid assets, rather than to deed Bradley to them as cotenants.
Mrs. McReady and her sister, as the nieces and beneficiaries of
decedent, each received assets worth $225,800 from the estate,
and Mr. McReady received $8,400 and repayment of the $95,000
decedent owed him.
At the time of trial, the per-month rental value of Primrose
was $4,500 to $5,000. Using the Consumer Price Index, as
published by the U.S. Department of Labor, Bureau of Labor
Statistics, the average (on the basis of $4,750 per month)
indexed rent for Primrose from March 1987 to June 1996 was
$408,560.
OPINION
The estate has contested respondent’s determinations that
the entire value of Western was includable in the gross estate
and that the estate is not entitled to deduct the closing costs
incurred to refinance the Bradley rental property.
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