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value price or that the lease would cause some other impediment
to the sale. In the circumstances here, Mr. McReady, as
executor, had three basic choices: (1) Sell Bradley, (2)
distribute it in kind to the nieces as cotenants, or (3)
distribute it in kind to one niece in fee simple. Because there
was insufficient cash and liquid assets to satisfy the debts of
the estate and distribute Bradley in kind to one niece, it was
necessary to refinance it to accomplish that end.
After Bradley was mortgaged, the estate was divided by
cashing out Mrs. McReady’s sister and transferring to Mrs.
McReady the mortgaged Bradley property and the remainder of the
estate, which likely included securities. Respondent contends
that we should be influenced by the fact that most of the
estate’s debt ($95,000) was owed to the executor, Mr. McReady.
Respondent contends that this was more to the McReadys’ benefit
than the estate’s. We do not agree with respondent’s reasoning.
It makes no difference that the debt was due to Mr. McReady
rather than to a bank. There is no question about the validity
of the debt, so that it makes no difference to whom it is owed.
Accordingly, we hold that the estate is entitled to reduce
the gross estate by the $10,700 in mortgage settlement fees.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011