Signal Hill plantation has survived the Civil War, many changes of ownership, land divisions and even a ghost. Now its destiny may rest in the hands of tax experts.

The 144-year-old house has been restored to its original pre-Civil War condition and modernized enough to be the comfortable 12-room home of Gordon and Violet Lawhorn.

Despite their fondness for the house, in which they have invested 10 years of their lives and $150,000, the Lawhorns are trying to sell it. Under present tax laws, they say, they cannot give the home to their children. On the other hand, if they will it to their children, the inheritance taxes on the property -- assesses at $365,000 -- might cause them to lose the house and possible the family business -- a foreign-auto spare-parts company.

Now Lawhorn, 57, is trying one last thing: He has ordered a manadatory raise in salary for all three of his children who are employed in the family business. With the raise they are paying the premiums on his life insurance policy. The money could be used as a buffer against the auctioneer's hammer.

Although restoration work continues at Signal Hill, it's harder for the Lawhorns to muster their old enthusiasm.

"We've worked hard," Lawhorn said, "and we hate to give up. It's a sad thing, but our home has become a potential liability to the children.

"We don't want them to lose their livelihood, but if they can't pay the inheritance taxes, the federal government could move in, sell Signal Hill and, if necessary, the family business.

"The pressures of inflation are doing us in. It wouldn't do a bit of good to have our home declared an historical monument, and we can only give the children $3,000 a year or a one-time gift of $30,000. Any more than this and we get involved with the problems of gift taxes."

The Lawhorn's daughter, Kathy, and son Will are married, have families of their own and no longer live at Signal Hill. However, the land on which Will built his home was part of the original plantation. Their eldest son, Wayne, a minister, lives with his parents.

The Lawhorns bought Signal Hill 10 years ago for $145,000. The house came with 96 acres of land. The assessment was then about $80,000, based on the then-prevailing rate of 30 percent of the fair market value.

Now, just 10 years later the assessed value of the property is $365,000, based on the new law that assesses on the basis of 100 percent of market value. b

When the Lawhorns took over Signal Hill it was in bad shape. The back porch was falling down, the roof leaned from front to back, and truckloads of trash had to be hauled away.

Representatives of the Virginia Historical Commission and the Valentine Museum in Richmond examined the house, established the date of construction as 1837 and suggested renovations. At that time, the Lawhorns learned that they owned a true "Virginia House" -- a house built of local materials and American design.

Virginians of the day wanted no part of English building styles and were not interested in importing building materials. They cut and milled their own timber, made their own bricks and forged their own nails and strapping.

At Signal Hill the result was deep foundations, basement walls about 19 inches thick and storm-proof clapboards.

The Lawhorns wanted the reconstruction to be authentic and when possible planned that work be done as it would have been 144 years before. The original, wide-plank floors were sanded and restored to their natural, nearly white color. The walls were stripped to original plaster and covered with a paint-over-canvas combination rediscovered by Violet Lawhorn.

The broken glass in the floor-to-ceiling windows was replaced painstakingly with glass of the period. Exterior doors were reframed and rehung.

The house was insulated and heavy-duty electric service brought in. Air conditioning and heating equipment were placed in a small utility room in the basement, forced air registers were located unobtrusively in the floors, and the ductwork was hidden behind 45-degree corners.

"It was a labor of love," Lawhorn said. "Craftsmen came to do a job, and ended up doing more than they bargained for. Some worked past their quitting time to make sure the job they started was finished."

It was during this construction that the "Ghost of Signal Hill" first appeared. The ghost was friendly but curious. Lights turned themselves off, doors opened and closed on their own, and workmen heard footsteps in empty rooms. "It was as if the ghost was making inspection trips of the construction," said Lawhorn.

As the work ended, the furnishing began. For years the Lawhorns had been collecting early Virginia-style furniture. They roamed the Eastern Seaboard, finding a chair in New Jersey, earthenware in Maryland and glass in North Carolina.

The dining room is resplendent with a massive, hand-carved Baroque suite -- purchased 30 years ago for $357 -- and now considered "priceless" by the Valentine Museum.

In the kitchen, the old and the new were blended. The refrigerator-freezer is set back in an alcove; the sink has been built into an 18th Century dry sink facing an old wooden double-door kitchen cupboard.

The house was built by Bickerson Winston on a portion of another 6,000-acre plantation. Located onlh two miles from the Hanover County courthouse, Signal Hill became a social center and gathering place for local residents.

When the Civil War began, the Winstons could look down on the long lines of Confederate troops moving up the road from Richmond, 12 miles to the south.

Situated on the highest ground in the area, the house became a prime military objective and was captured by the Union forces. They converted the house into a Union hospital and held the Winstons hostage. Word was passed to the Confederate command that if the house was shelled, the Winstons would be dealth with harshly. The Confederates heeded the warning, and the house and surrounding outbuildings were not attacked.

After the war, Signal Hill once again became a working farm. It passed through a series of owners and in 1945 was purchased by T. Hunter Daughterty of New Jersey. He farmed the land, then sold off several parcels. The rest he willed to Carson Newman College in Tennessee.

The college offered Signal Hill for sale on the basis that it would be restored.The Lawhorns agreed and bought it in May of 1971.

Now there may be still another sale. The Lawhorns are asking $450,000 for Signal Hill but hope they never come to contract. The Reagan administration has talked about legislative relief for this kind of situation so the Lawhorns hang onto the rope that they will be able to hang on.