Frazee v. Commissioner
United States Tax Court
Ps transferred improved real property to their children on Oct. 7, 1985, receiving in exchange a promissory note in the principal sum of $ 380,000, bearing interest at 7 percent, and secured by a first deed of trust on the improved real property. 1. Held, the highest and best use of the improved real property was industrial use.
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Ps transferred improved real property to their children on Oct. 7, 1985, receiving in exchange a promissory note in the principal sum of $ 380,000, bearing interest at 7 percent, and secured by a first deed of trust on the improved real property. 1. Held, the highest and best use of the improved real property was industrial use. Held, further, the value of the property was $ 1 million, allocating $ 950,000 to the land and $ 50,000 to the improvements. 2. Held, further:Sec. 7872, I.R.C., provides the proper interest rate to discount the promissory note for gift tax purposes. Ballard v.…
1Opinion of the Court
HAMBLEN, Judge:
Respondent determined deficiencies in Edwin H. and Mabel G. Frazee's (petitioners) Federal gift tax and additions to tax for the taxable years as follows:
Addition to tax
Petitioner Docket No. Year Deficiency sec. 6660
Edwin H. Frazee 27995-89 1985 1986 $171,555 59,472 $51,466.50
Mabel G. Frazee 27996-89 1985 1986 171,555 59,472 51,466.50
Unless otherwise indicated, section references are to the Internal Revenue Code in effect for the taxable years at issue and Rule references are to the Tax Court Rules of Practice and Procedure.
After concessions by respondent,1 the issues remaining…
2Cases cited39 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Rubin v. United StatesSupreme Court of the United States · 1981
- Olson v. United StatesSupreme Court of the United States · 1934
- Commissioner v. WemyssSupreme Court of the United States · 1945
- Buffalo Tool & Die Mfg. Co. v. CommissionerUnited States Tax Court · 1980
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3Cited by41 opinions
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- PBBM-Rose Hill, Ltd. v. Comm'r of Internal RevenueCourt of Appeals for the Fifth Circuit · 2018
- Estate of Strangi v. CommissionerUnited States Tax Court · 2000
- Frazier v. CommissionerUnited States Tax Court · 1998
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