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decision is reached. See Broadhead Trust v. Commissioner, T.C.
Memo. 1972-196.
In the instant case, petitioner filed an amended Federal
income tax return requesting a refund. The request stemmed from
the agreement of the parties as to the increased value of the NW
stock included in Mr. McMorris' estate, which value became the
basis of the NW stock redeemed from decedent. Because the amount
of income tax was challenged in that fashion, it is appropriate
that we consider postdeath events when determining the deduction
for estate tax purposes.
Respondent has approved petitioner's refund request. That
portion of the Federal income tax liability that is to be
refunded is no longer a valid and enforceable claim against the
estate. Accordingly, we hold that the amount of the deduction
for petitioner's Federal income tax liability is reduced by the
amount of the refund. Cf. Estate of Shedd v. Commissioner, 37
T.C. 394 (1961), affd. 320 F.2d 638 (9th Cir. 1963) (deduction
for transferee liability reduced by amount recovered from
transferor husband's estate upon receipt of refund); sec.
20.2053-6(f), Estate Tax Regs.
Deduction for Colorado Income Tax Liability
An individual's liability for Colorado income tax is based
on Federal taxable income with certain adjustments. See Colo.
Rev. Stat. sec. 39-22-104(1) (1998); see id. sec. 39-22-601(6)(a)
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