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assessments (a) less rebates (r).1 Under this definition, a
deficiency in estate tax will generally result if a taxpayer is
found to have undervalued property included in the gross estate
because an increase in the value of included property will
increase the amount of tax imposed by subtitle B. Just as the
amount of the deficiency is affected by the amount of tax imposed
under subtitle B, it can also be affected by "amounts previously
assessed (or collected without assessment) as a deficiency", sec.
6211(a)(1)(B), see sec. 1.6211-1(e), Income Tax Regs., and
rebates made, see sec. 6211(a)(2).
In applying equitable recoupment within the statutory scheme
of section 6211(a), we are in effect holding, after concluding
that the residuary legatee paid too much income tax on
petitioner's gain on the 1992 sales of Willits and Savings
shares, that petitioner has been assessed an additional amount of
estate tax within the meaning of section 6211(a)(1)(B). In so
doing, we treat the income tax overpayment as if it were a
partial assessment of the estate tax deficiency. The residuary
legatee's income tax overpayment thereby has the effect of
reducing the amount of the estate tax deficiency, not as a below-
1 Expressed as a mathematical formula:
d = t - (s + a - r).
The formula can also be expressed as follows:
d = (t - s) - (a - r).
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