McLaughlin

Plaintiff brought this action at law against the Collector of Internal Revenue under section 1122 (c) of the Revenue Act of 1926, Act Feb. 26, 1926, 44 Stat. ch. 27, p. 9 (28 USCA § 41 (20) and note), to recover alleged excess income taxes assessed, for which claim for refund had been previously filed and rejected. The excess resulted from the disallowance of a deduction made in the income tax return.

The facts are undisputed. Mary Emilie Parrott died testate in March, 1922. In June, 1922, her heirs organized the plaintiff corporation for the sole purpose of receiving, and from time to time reinvesting, the assets of her estate. Except for a few qualifying shares, all of the stock of the corporation is owned by the heirs, who assigned their respective interests in the estate to the corporation in exchange for their proportionate amount of stock. Distribution of the estate -was made directly to the plaintiff. Subsequent to ■ distribution, on August' 6, 1926, plaintiff paid to the county treasurer of San Mateo county, Cal., $11,-524.03 as additional inheritance taxes (additional to what had already been paid). In its income tax return for the year ending December 31, 1926,…