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with the findings and conclusions of the Court. At the Court’s
discretion, the parties may then be given an opportunity to be
heard in argument thereon, and the Court will determine the
correct deficiency. Rule 155(b). However, parties may not raise
new issues or matters in their Rule 155 computations. See supra
note 3; see also Rule 155(c); Bankers Pocahontas Coal Co. v.
Burnet, 287 U.S. 308, 312 (1932). The starting point for the
computation is the notice of deficiency from which the parties
compute the redetermined deficiency on the basis of matters
agreed to by the parties or determined by the Court. See Home
Group, Inc. v. Commissioner, 91 T.C. 265, 269 (1988), affd. 875
F.2d 377 (2d Cir. 1989).
Petitioner contends that the issue regarding the gift tax
deduction is a new issue which respondent may not assert in his
Rule 155 computation. Respondent concedes that he failed to
recognize his computational error in the notice of deficiency and
that he failed to plead an increased deficiency during
litigation. Nevertheless, respondent argues that the question of
whether decedent’s transfer of the Marital Fund assets to GFLP
constituted a completed transfer for gift tax purposes was
directly at issue in this estate tax case and in the gift tax
case.
We agree with respondent. While the notice of deficiency
serves as a starting point for the Rule 155 computation, the
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