Edith Hunter Hornberger, et al. - Page 15




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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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