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taxable events occurred within the same calendar year, and within
67 days of each other, that the single-transaction, item, or
event requirement of equitable recoupment has been satisfied.
3. Inconsistent Treatment
Respondent, in denying the Administration Trust’s second
refund claim made in 1990, treated the same shares inconsistently
with respondent’s statutory notice to petitioner determining an
estate tax deficiency based on a different valuation of those
shares at the same time, the time of decedent’s death. It
follows from my conclusion in the preceding section that this
case satisfies the single-transaction requirement that respondent
has subjected the same item to inconsistent tax treatment. Thus,
the inconsistent-treatment requirement is met.23
23I'm aware that it's not necessarily inconsistent that the
same fund should be subjected to both income and gift tax, as the
Code sections having to do with those two taxes are not construed
in pari materia. Farid-Es-Sultaneh v. Commissioner, 160 F.2d 812
(2d Cir. 1947), revg. 6 T.C. 652 (1946). That does not, however,
gainsay a real inconsistency in our case, because both tax
results depend upon the same matter of fact, the fair market
value of the same shares at decedent’s death. It would be
inconsistent to hold those shares to have had one value for
estate tax purposes and another for income tax purposes. There
is a presumption that the estate tax value of an asset is correct
and applies also to determine income tax basis. Hess v. United
States, 210 Ct. Cl. 483, 537 F.2d 457, 463 (1976); Swift v.
Wheatley, 538 F.2d 1009, 1010 (3d Cir. 1976); Levin v. United
States, 373 F.2d 434, 438 (1st Cir. 1967); Williams v.
Commissioner, 44 F.2d 467, 469 (8th Cir. 1930), affg. 15 B.T.A.
227 (1929); Feldman v. Commissioner, T.C. Memo. 1968-19; sec.
1.1014-3(a), Income Tax Regs.; Rev. Rul. 54-97, 1954-1 C.B. 113.
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