FRANK, Circuit Judge.
1. The taxpayer's appeal
Section 23(c)(1)(D), 26 U.S.C.A., provides that, in computing a taxpayer's net taxable income, there shall be no deduction of estate taxes paid by the taxpayer. Under § 827(b), 26 U.S.C.A., taxpayer, as a transferee, was "personally liable" for the estate tax. Accordingly, she could not, like a creditor, stand in the government's shoes, and therefore we regard as untenable her contention, i.e., that, by her payment of that tax, she became subrogated to the government's rights so that the annuity payments represented payment of a debt, not income.
2. The Commissioner's appeal
When taxpayer paid the estate tax out of her own funds, in effect she made a purchase of annuity contracts to the extent of that payment. The amounts received pursuant to the annuity contracts are, therefore, not, under § 22(b)(2)(A), 26 U.S.C.A., tax-free returns of capital, except as in that subsection provided. Consequently, we think the Tax Court erred in allowing taxpayer to amortize the amount of her payment of the estate tax.
Affirmed as to taxpayer's appeal; reversed as to the Commissioner's appeal.