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taxes as an assertion of equitable recoupment in respect to the
open 1980 tax year must fail because consideration of the 1983
and 1984 years was barred by the statute of limitations, and the
1983 and 1984 sales of the Holiday Inns stock transactions were
distinct from the Harrah/Holiday Inns merger transactions
occurring in 1980. Although the Court of Appeals found "a common
thread of factual similarity" linking the 1983 and 1984
transactions with the 1980 transactions, it was not enough to
provide jurisdiction. See id. at 1126.
In Estate of Harrah v. United States, 77 F.3d 1122 (9th Cir.
1997), the Court of Appeals for the Ninth Circuit did not decide
the issue now before us; the value of the stock in Harrah had
been stipulated, and when the District Court determined the value
of the convertible debentures, it consequently determined the
amount of gain from the sale of that stock. Unlike the stock at
issue in this case, the convertible subordinated debentures were
not items included in the estate for estate tax purposes.
Furthermore, as the taxpayer's 1980 claim for refund of the
overpayment of income tax realized in that sale was not time
barred, the court did not have to consider the issue of whether
the estate could recoup the excess income tax paid as a credit
against the underpaid estate tax. In short, the issue now before
us is the issue that was not before the Court of Appeals.
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