extensive advertising and its prominence in the drygoods trade, I think five years' average of the annual net profits is a reasonable value of the good will of the business (Von Au v. Magenheimer, 126 App. Div., 257); but in order to ascertain the average net annual profits which is to be multiplied by five, a period of at least six years immediately prior to the date of decedent's death should be taken into consideration. The average annual profits thus ascertained, multiplied by five, would represent the value of the good will of the business of James A. Hearn & Son at the date of the decedent's death, if his executors could sell it on that day. The articles of copartnership, however, provided that decedent's interest in the firm could not be sold at the date of decedent's death, but should continue until the termination of the partnership on March 1, 1916. Therefore the value of the good will at the date of decedent's death would be the sum which, if invested at five per cent. on that day, would equal on March 1, 1916, the amount obtained by multiplying the average annual net profits by five. The appeal of the executors is confined to the value of the good will, no question being raised as to its distribution under the terms of the will of the decedent. It is therefore unnecessary to inquire whether the persons who were partners of the copartnership which expired on March 1, 1916, and who were entitled to receive a certain number of shares of stock in the corporation directed to be formed by the will of the decedent, are beneficiaries of a part of the good will and their interests taxable accordingly. The order fixing tax will be reversed and the appraiser's report remitted to him for correction as indicated. C.- DEDUCTIONS In order to ascertain the value of the interest transferred which is subject to the tax we must not only consider the assets but also the liabilities, consisting of the debts of the estate and the expenditures which must be deducted in order to ascertain the net value of the estate passing to the heir, devisee or distributee. Dower, curtesy, family allowance, homestead, community interest, have all been considered because they are not deductions from the estate of the decedent but never in fact, became a part of that estate. 1. Mortgages. As to mortgages we have seen that they are to be deducted from the value of the realty on the theory that it is the equity of redemption and not the gross value that is subject to the tax. Matter of Sutton, 3 App. Div. 208; 38 Supp. 277; aff. 149 N. Y. 618. Matter of Murphy, 32 App. Div. 627; 53 Supp. 1110; aff. 157 N. Y. A direction by testator to pay certain mortgages out of personalty does not authorize the appraiser to deduct the amount from the value of the personal estate. Matter of Berry, 23 Misc. 230; 51 Supp. 1132. Matter of Livingston, 1 App. Div. 368; 37 Supp. 463. Under chapter 41, New York Laws 1903, mortgages are deducted from appraised value of the real estate. A devisee of land which is subject to a mortgage takes it cum onere, and the equity therein is only liable to taxation. Matter of Kene, 8 Misc. 102; 29 Supp. 1078. In the case of a blanket mortgage covering several pieces of realty where testator has made an apportionment on sale of one of the parcels it is binding on the executor and hence on the appraiser. Matter of Tremberger, N. Y. L. J., Oct. 31, 1913. 2. Debts. Debts of the decedent are, of course, to be deducted from his assets in order to ascertain the net value of his estate, but what of the personal liability of the obligation on a mortgage bond? a. LIABILITY ON MORTGAGE BOND. This was recently illustrated in the Matter of Prentiss, N. Y. Law Journal, Dec. 2, 1916. Here a decedent had deeded the real estate to his wife subject to a mortgage which she did not assume. After holding his liability on the bond a debt of the testator's the surrogate said: "But on the other hand the matter of its payment must be viewed as differing from the payment of an ordinary debt, for the reason that in all likelihood it will fall upon the real estate under the terms of the mortgage. In view of this I think that the proper disposition of the appeal is to suspend giving to said bond the status of a debt until its value is irrevocably fixed by the final disposition of the mortgage." Under similar circumstances the Surrogate was sustained when he refused to allow the obligation on the bond as a deduction. Matter of Calman, 100 App. Div. 517; 91 Supp. 1095. See also Matter of Skinner, 45 Misc. 559; 92 Supp. 972; aff. as to this point, 106 App. Div. 217; 94 Supp. 144. b. REPAIRS TO REAL ESTATE. The cost of repairs to real estate, like mortgages, is a charge on the land and is not to be deducted from the personal assets when the repairs were contracted for during the lifetime of the decedent though not completed until after his death. Matter of Baudouine, 5 App. Div. 622; 39 Supp. 1121. Matter of Kemp, 7 App. Div. 609; 40 Supp. 1144; aff. 151 N. Y. 619; 45 N. E. 1132. Surrogate Fowler of New York County took an opposite view in Matter of Amsinck, New York Law Journal, Feb. 21, 1913, but possibly the decision of the Court of Appeals in the Kemp case was not called to his attention. The value of the betterments should, at all events be taken into consideration in valuing the real estate. C. DEBTS PAID BY WILL. When a debt is forgiven by will the transfer is taxable. Matter of Bartlett, 4 Misc. 380; 25 Supp. 990. If not outlawed, they must be appraised at their fair market value and not their face value. Morgan v. Warner, 45 App. Div. 424; 60 Supp. 963; aff. 162 N. Y. 612; 57 N. E. 1118. If the debt is valueless, that is, if the beneficiary is financially irresponsible no tax is imposed, the mental relief of a bankrupt in having one score out of many canceled not being regarded as a taxable commodity. Morgan v. Warner, 45 App. Div. 424; 60 Supp. 963; aff. 162 N. Y. 612; 57 N. E. 1118. And where not forgiven they must be deducted from the distributive shares. Matter of Smith, 14 Misc. 169; 35 Supp. 701. "It is against conscience that the legatee should receive anything out of the fund without deducting therefrom the amount of that fund which is already in his hands, as a debtor to the estate." Smith v. Kearney, 2 Bart. Ch. 533. Cited and followed in Leask v. Hoagland, 64 N. Y. 159. And such debts will not be construed as advancements rather than loans on the testimony of interested parties as against written evidence of the obligation. Matter of Dormitzer, N. Y. L. J., Feb. 6, 1913. A more serious question arises when services have been rendered to the decedent and are paid for by will. The payment of the debt by will is taxable. Shall the legatee who accepts the payment still be permitted to prove the value of the services and have them allowed as a deduction? A New York Surrogate has so held, though the decision is of doubtful authority. Matter of Enos, 61 Misc. 594; 115 Supp. 863. In this case, where a niece had rendered services to testatrix and the latter, after the usual clause relative to the payment of debts and funeral expenses, devised all her property to said niece; held, that the value of niece's services was a proper deduction. The contrary was held in Kansas. State v. Mollier, 96 Kan. 514; 152 Pac. 771. And in New York, where a testatrix left a sum of money to her daughter-in-law pursuant to an agreement thus to compensate her for supporting her husband (the son of the testatrix), and where, after the death of the testatrix, the daughter-in-law presents a claim against her estate based upon the agreement, and the claim after having been rejected by the executor is established and paid, the |