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if the event had occurred in the year of the deduction. See
Hillsboro Natl. Bank v. Commissioner, supra; Frederick v.
Commissioner, supra at 41.
Petitioner maintains that the tax-benefit rule is not herein
applicable. She posits that the estate and petitioner are
different persons–-petitioner claimed the interest deduction on her
1988 amended tax return; the refund check was payable to the estate
in 1992 (as the estate’s recovery in 1992 of the amount deducted).
Continuing, petitioner asserts that it is of no consequence that
the trust (or petitioner) ultimately received the proceeds from the
refund check because it was the estate which had title to, and
possessed, the refund.
Respondent asserts petitioner’s position is flawed, relying on
the stipulation agreed to by the parties: “Upon receipt of the
estate tax refund check, the administratrix of the Hunter Estate
provided the check to Edith Hunter Hornberger, who negotiated it to
the co-trustees of the Hunter Trust, who deposited it into the
trust bank account.” Respondent contends that although the refund
check was payable to the estate, the funds were returned in 1992 to
petitioner (who had taken the interest deduction on her 1988
amended return).12 According to respondent, it is inconsistent for
12 Respondent points to the stipulated fact that the 1992
refund check included “$2,290,468.85 [which] represented a return
of part of the $2,357,493 deficiency interest paid by the trust
in 1988.” Moreover, the parties stipulated that the amended
(continued...)
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