270 P.2d 83 | Mont. | 1950
District Judge (sitting in. place of MR. JUSTICE BOTTOMLY, disqualified) :
Before the time set for determining inheritance tax in the lower court the board filed written objections claiming that an inheritance tax of about $1,300 was due on the transfer to the husband of the last mentioned property. While not considered relevant here, the fact is mentioned that after the filing of the inventory and appraisement and before the final hearing to determine inheritance tax, the husband commenced and successfully concluded a proceeding to terminate the joint tenancy, the court holding that the interest of the decedent terminated on her death and the title to the real property here disputed was at the time of the decree vested in the surviving husband. At the hearing to determine inheritance tax proof was duly made as to the nature of the tenancy in the disputed property, that it was purchased with funds of the surviving husband, and had never belonged to the decedent. The court thereupon made its order finding that there was no inheritance tax due, and this appeal followed.
The state .has assigned twelve specifications of error, half of which are directed at the quantity or quality of the evidence upon which the no tax order is predicated. The board was notified of the hearing in accordance with law, had no counsel present, and now enjoys before this court the same standing as any
The remaining specifications of error deal with alleged errors of law, which resolve themselves into one fundamental question: Whether the transfer of decedent’s interest in the jointly held property, which originally belonged to the surviving husband and had never belonged to decedent, is subject to inheritance tax.
The state urges that the transfers to the wife in joint tenancy are presumed gifts, and in the absence of evidence to rebut this presumption, the wife’s half interest constitutes her own separate estate subject to tax. This court has repeatedly held that such transfers between near relatives are presumptively gifts. 41 C. J. S., Husband and Wife, sec. 244, p. 731; 2 Bogert on Trusts & Trustees, sec. 459, p. 1391; Bingham v. National Bank of Montana, 105 Mont. 159, 72 Pac. (2d) 90, 113 A. L. R. 315; Bast v. Bast, 68 Mont. 69, 217 Pac. 345; Clark v. Fleming, 60 Mont. 246; 198 Pac. 546; McQuay v. McQuay, 81 Mont. 311, 263 Pac. 683; McLaughlin v. Corcoran, 104 Mont. 590, 69 Pac. (2d) 597; Lewis v. Bowman, 113 Mont. 68, 121 Pac. (2d) 162. There is no evidence here to rebut that presumption, nor is there any evidence of a trust relationship. Further R. C. M. 1947, sec. 91-4405, formerly subdivision 6 of this section 10400.1 of R. C. M. 1935, requires this interest in a joint tenancy to be regarded, for inheritance tax purposes, as an interest in a tenancy in common devised or bequeathed by will. Were it not for the exception at the end of section 91-4405, there would be no doubt of the taxability of the wife’s interest in the joint tenancy.
Section 91-4405 and its exception present the only question in the case. The donor still surviving and the death of the donee having followed the creation of the joint tenancies, the reasoning of the case State Board of Equalization v. Cole, 122 Mont. 9, 195 Pac. (2d) 989, is not relevant. The donor is not a cestui que trust as in the case of In re Mayer’s Estate, 110 Mont.
It seems quite clear that as to jointly owned property the tax provided in section 91-4405 is on the fractional interest of a decedent, one-half, one-third, one-fourth, or whatever interest the decedent owned; that the word “thereof” contained in the exception has reference to the word “property” last preceding; and that the phrase “never to have belonged to the decedent” must necessarily relate to the time prior to the creation of the joint tenancy, or else be entirely meaningless. We therefore interpret the exception to mean, — except such part of the, decedent’s fractional share of the property thus deemed to be bequeathed or devised by will as may be shown to have originally belonged to the survivor and never to have belonged to the decedent prior to the creation of the joint tenancy.
While the question does not seem to have been directly decided by the courts, 26 U. S. C. A., sec. 811, Code of Federal Regulations, Title 26, sec. 81.22, and the decision in Re Mayer’s Estate, supra, lend support to the interpretation here adopted.
The judgment is affirmed.
Rehearing denied July 29, 1950.