110 T.C. No. 2
UNITED STATES TAX COURT
ESTATE OF ALGERINE ALLEN SMITH, DECEASED, JAMES ALLEN SMITH,
EXECUTOR, Petitioner v. COMMISSIONER OF INTERNAL REVENUE,
Respondent*
Docket Nos. 19200-94, 3976-95. Filed January 12, 1998.
P (decedent's estate) settled and paid claims that
were based in part on excessive royalties that had been
paid to and reported by decedent in prior years. In
our previous opinion in these cases, we held that P was
entitled to an overpayment of income tax pursuant to
application of sec. 1341, I.R.C., and that such
overpayment was includable in the taxable estate.
Estate of Smith v. Commissioner, 108 T.C. 412 (1997).
The parties now disagree on the method of calculating
the overpayment. R also seeks to amend the answer in
order to decrease the credit for State death taxes that
was previously allowed in the estate tax notice of
deficiency.
Held: Relief under sec. 1341, I.R.C., is
restricted to the portion of P's settlement payments
that represents items of income that were previously
included in decedent's income.
*This opinion supplements our opinion in Estate of Smith v.
Commissioner, 108 T.C. 412 (1997).
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