University of Virginia Library

I have had some conferences and correspondence during the past
several weeks with Charles E. Wheeler of Easton, Maryland, local counsel
for this estate, with regard to the preparation of the second
administration and distribution account and the Maryland estate tax
return.

I enclose copy of the First Administration and Distribution Accounts
filed at the time the Yoakum County Gas Company stock was turned over to
Mrs. Moyston in order to liquidate that company. I also enclose copy of
proposed Second Administration and Distribution Accounts, which I
understand will be filed in the near future in the Orphans' Court for
Talbot County, Maryland.

The value of the interest of the University in the Maryland estate
distributed by these accounts (after deducting the value of Mrs.
Moyston's life estate) would appear to be $581,220.13. Adding to this
amount the value of the University's interest in "Little Timberneck"
Farm, $6,107.48, the total value is $587,327.61. The Maryland
inheritance tax on this amount (if it is decided to pay the tax at this
time) would be $44,749.57. However, the Maryland estate tax payable by
the estate in the event the University did not elect to pay the
inheritance tax at this time would be $18,452.65, and since credit is
given against this tax for inheritance taxes paid, the estate is willing,
rather than pay this as Maryland estate tax, to contribute this amount
toward the inheritance tax payable by the University, which would result
in a net inheritance tax payable by the University of $26,296.92

On the other hand, since the present value of the Maryland residuary
estate is about $950,000. an inheritance tax of about $71,000. would be
payable by the University at the time of the transfer of the assets to it
if no payment is now made by the University and if there is no change in
the present value of the assets.

We have been advised that adjustments on audit of the Federal estate
tax return will result in a deficiency not to exceed $25,000. Any
deficiency would result in an additional Maryland estate tax. In answer
to my inquiry, Charlie Wheeler assures me that the estate would also pay
over to the University an amount equal to any additional Maryland estate
tax which the estate would otherwise be obligated to pay if the
University had not elected to pay the inheritance tax at this time

I believe, however, that the University should make the decision of
whether it wishes to exercise the option to pay the tax at this time based
upon the assumption that the Maryland inheritance tax payable at this
time would be approximately $26,000. While the exact amount cannot be
determined until the accounts are filed and approved and the Court passes
upon a petition to determine the tax, I thought that it may be advisable
to bring this matter to your attention so that a decision may possibly be
made before the summer months and payment made at the appropriate time if
it is determined that the option given by the Maryland Statute should be
exercised.

If you have any questions concerning the matter or wish any further
details, you will, of course, let me know.

I also enclose for the file of the Rector and Visitors certified copy
of the final Decree of the Probate Court of Lea County, State of New
Mexico, with respect to this estate. I previously advised you that the
inventory value of the decedent's interest in real and personal property
in New Mexico, as fixed by the appraisers of that State, is $532,990.85,
and that the New Mexico inheritance tax (now 4%) will not be payable by
the University until the property in that State is distributed to the
University upon the death of Mrs. Moyston.

With best regards,