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 *150 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 C-outt 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.