§ 221 Where Estate Is Over $10,000. The aggregate value of the transfers presently taxable, does not determine the liability of the transfers to taxation. In the estate of Caroline W. Gostenhofer the net estate was over $10,000. The decedent gave two sisters $750 each, and created a trust as to the residue for the benefit of one of her sisters for life, the value of which life estate was fixed at $5,933. The remainder was found to be of the value of $4,249, and as to such remainder after the death of the life beneficiary the testatrix in her will provides as follows: "I give, devise and bequeath such residuary estate unto such persons as my said sister K. W. F. by her last will and testament or codicil thereto duly executed may direct and appoint." The value of the remainder subject to the power of appointment was held not presently taxable, the order imposing a tax at 1 per cent. on $7,433, the value of the life estate and two legacies above mentioned. The executors appealed from the taxing order on the ground that the tax was erroneously assessed for the reason that the property transferred by the will of the decedent passes to persons taxable at 1 per cent., and that the aggregate value of such property subject to transfer tax is less than $10,000. The surrogate affirmed the taxing order, holding: * * that the title to the trust property after the death of the life beneficiary passed at once on the death of the decedent to her next of kin, the property being personalty, and that their rights therein are in the nature of a vested remainder, subject to being divested by the execution of the power given in the will (Matter of Haggerty, 128 App. Div. 479; affd., 194 N. Y. —). At the time of the death of the decedent there was consequently property exceeding in value $10,000 transferred by operation of her will and of the law. None of it passed to persons or corporations exempt by law from taxation on real or personal property, and the result is that the tax fixed by law must be imposed (Matter of Corbett, 171 N. Y. 516)." Matter of Gostenhofer, N. Y. Law Journal, June 3, 1909, Surrogate Thomas. Id.; Over $500 but Less than $10,000. § 221 291. When Net Estate Is $500, but Less than $10,000, Transfers to 5-Per Cent. Class Are Taxable. This question was finally passed upon by the Court of Appeals in the Matter of Costello, 189 N. Y. 288. In that case the decedent, Mary Costello, died intestate, leaving her surviving a sister and two nieces. Her gross estate amounted to $1,168.62, and her net estate for distribution amounted to $654.90, the sister being entitled to one-half and the nieces each to one-fourth thereof. The surrogate of Kings county, following the Matter of Mock (supra), decided that the estate of the decedent was not subject to a transfer tax. The Appellate Division (117 App. Div. 807) reversed the order of the surrogate. The Court of Appeals, in affirming the decision of the Appellate Division, and after reviewing the Matter of Hoffman, 143 N. Y. 327, and the Matter of Corbett, 171 N. Y. 516, says: "We thus have this situation presented: The estate passing into the hands of the public administrator amounted to $1,168.62; in other words it exceeded five hundred dollars, and is the amount that determines whether the very small sum passing to each of these nieces is taxable. This is precisely the same question that was determined in Matter of Corbett (supra), except that the court was dealing with different exemptions and larger amounts. The share of the decedent's estate to which the sister is entitled has properly been held not subject to the transfer tax, but the shares of the nieces are clearly taxable." 292. The Whole Estate Includes Real as Well as Personal Property without Regard as to Its Character. By the amendment to sections 220 and 221 by chapter 41 of the Laws of 1903, in effect March 16th of that year (re-enacted by chapter 368 of the Laws of 1905, without amendment), the law imposed a tax upon real § 221 Includes Both Real and Personal Property. In property as well as personal property passing to those in the 1-per cent. class of taxable persons, and the question arose as to whether it was intended that both the real property and the personal property must severally be of the value of $10,000 before it was taxable, or whether the value of the two classes of property was to be considered together for the purpose of ascertaining if the taxable limitation had been reached. the Matter of Hallock, 42 Misc. Rep. 473, 87 N. Y. S 255, a brother devised and bequeathed to his sister all his real estate of the value of $6,500, and personal property exceeding $10,000 in value, and it was claimed on the part of the estate that the values of the real and personal property were not to be added together; that real property passing to a sister was only taxable when, considered alone, it exceeded $10,000 in value. The court held that, since this amendment, it was the intention of the law to impose the tax on the property, "real or personal "; that is to say," of whatever kind," or "without regard to its character," and that the aggregate value of the real and the personal property passing to the sister was taxable at 1 per cent. To the same effect see Matter of Fisher, 96 App. Div. 133, 89 N. Y. S. 102. In view of the fact that the real object of this amendment was to make real property equally taxable with personal property, it is doubtful if this precise question will ever be submitted to the Court of Appeals for determination, in view of the construction given to section 22 of the Act of 1892, defining the words 66 estate " and " property "(now section 243 of chap. 62 of the Laws of 1909, being chap. 60 of the Consolidated Laws) by that court in the Matter of Hoffman, 143 N. Y. 327. Adopted Children, and Child of. 293. Adopted Children. § 221 The word " children, as used in section 1 of the Act of 1885, did not include an adopted child, and therefore a devise or bequest to an adopted child of the testator prior to the amendment of 1887 was taxable. Matter of Miller, 110 N. Y. 216; Matter of Cager, 111 N. Y. 343. Since chapter 713, Laws 1887, in effect June 25th of that year, adopted children have been considered in the same class with those named in the 1-per cent. class of taxable persons. 294. Recital in Will, Respecting-Not Conclusive. my Where testator gives a share of his estate to " niece and adopted daughter," naming her, the appraiser must take proof of the adoption, as the mere recital in the will is not conclusive. Matter of Fisch, 34 Misc. Rep. 146, 69 N. Y. S. 493. 295. Child of an Adopted Child. In several of the earlier cases it was held that the children of an adopted child were not included within the exception in favor of an adopted child. Matter of Fisch, 34 Misc. Rep. 146, 69 N. Y. S. 493. Citing Matter of Moore, 90 Hun, 162, 35 N. Y. S. 782. The Court of Appeals, in the Matter of Cook, 187 N. Y. 253-260, held that a legacy to the son of an adopted daughter is taxable at the same rate as if his mother had been the natural child of the testator, namely, 1 per cent., since the Domestic Relations Law relating to the effect of the adoption of children (Laws 1896, chap. 272, § 64*) gives to an adopted child the *Now section 114 of chapter 19 of the Laws of 1909, being chapter 14 of the Consolidated Laws. § 221 Transfer from Child to Foster Parent. same legal relation to the foster parent as a child of his body, and that relation extends to the heirs and next of kin of the child by adoption the same as to those of a child by nature. 296. Transfers from an Adopted Child to Its Foster Parent. The statute is silent as to the rate of tax on transfers from an adopted child to its foster parent. Section 64* of the Domestic Relations Law provides that "Thereafter the parents of the minor are relieved from all parental duties toward, and of all responsi bility for, and have no rights over such child, or his property by descent or succession. The foster parent or parents and the minor sustain toward each other the legal relation of parent and child and have all the rights, and are subject to all the duties of that relation, including the right of inheritance from each other. The Court of Appeals, in the Matter of Cook (supra), held, in construing the words "lineal descendants" found in section 221 of the Tax Law, that they must be read in connection with the statute governing the effect of adoption, and it would seem from the language of the portion of section 64* of the Domestic Relations Law, above quoted, that when this provision is read in connection with the exception in reference to the taxation of transfers to a father, that a foster father is included in the exception and taxable, if at all, at the rate of 1 per cent. 297. Widow of an Adopted Son 1-Per Cent. Class. Following the decision in the Matter of Cook, 187 N. Y. 253, it has been held that a legatee, who was the *Now section 114 of chapter 19 of the Laws of 1909, being chapter 14 of the Consolidated Laws. |