In re Middendorf, (Bkrtcy.D.Kan.)

Bankruptcy Estate - Court allocates tax refund utilizing "calendar day" method to determine estate's interest therein.

A tax refund to which Chapter 7 debtors were entitled as a result of their overpayment of federal income taxes, both as a result of wage withholding that occurred both pre- and postpetition and due to the debtors' estimated prepayment of taxes, using prepetition income, shortly after realizing a profit from the sale of stock, had to be allocated between the pre and postpetition periods, for purpose of determining what portion of the refund was estate property and what portion was the debtors' separate property. To make this allocation, a bankruptcy judge in Kansas used the "calendar day" method to calculate the amount of taxes that debtors had paid prepetition, either by wage withholding or through their estimated payment, and then subtracted the debtors' total tax debt for the year. The difference was the amount of the refund that was included in property of the estate.

Date of the decision: 2/13/08

Full opinion click here.