Schauer

The Regents of the University of California challenge the order of the probate court allocating to the University of California, Los Angeles (UCLA), a portion of the liability for income tax, and interest on unpaid income tax, paid by the estate of Foad Dehgani-Fard on after-discovered assets. 1 Appellant claims that it should not be liable for any *800 portion of the income tax liability because as an educational institution, UCLA is a charitable organization exempt from income taxation on its share of the assets, and that in its tax returns, the estate claimed and received a partial exemption based on UCLA’s charitable status. We agree, and reverse the order.

FACTUAL AND PROCEDURAL SUMMARY

Foad Dehgani-Fard died in 1990, leaving an estate in excess of $1 million. Following a will dispute, a settlement was reached establishing four residuary beneficiaries. Under this settlement, decedent’s wife would receive 50 percent of the estate, UCLA would receive 37.5 percent, and two relatives would receive 6.25 percent each. An order settling the account was entered in November 1993 (the 1993 order). It provided for distribution of any after-discovered assets in the same…