- 35 -
Not considering any other adjustments, once one takes into
account both our Mueller I opinion on the date-of-death fair
market value of the shares and respondent's allowance of the
credit for tax on prior transfers not claimed on the Federal
estate tax return,9 the parties agree that there is no deficiency
in petitioner’s estate tax; petitioner is in an estate tax
overpayment posture, whether or not equitable recoupment applies
in this case. This is because the credit for previously taxed
property that petitioner failed to claim on its estate tax return
and that respondent has allowed (and all agree, properly so)
exceeds the amount of the tentative deficiency resulting from our
valuation of the shares. And this will be true irrespective of
whether the credit for State death taxes ultimately allowable is
the amount claimed on the estate tax return as filed or the
larger credit that the parties agree would be allowed as a result
of the increase in the tentative deficiency resulting from our
valuation of the shares:10
Credit for previously taxed property . . . . . $1,152,649
Less: Agreed reduction in unified
credit . . . . . . . . . . . . . . 6,000
Deficiency attributable to
9This credit was for property received by decedent from the
estate of Robert E. Mueller, her stepson.
10It's not clear from the parties' stipulation on this point
whether they've taken into account the partially offsetting
reduction in the credit for State death taxes that would result
from the reduction in estate tax liability arising from the
application of equitable recoupment. The answer to this question
would have no effect on the outcome.
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