T.C. Memo. 1998-325
UNITED STATES TAX COURT
ESTATE OF LEWIS S. THOMPSON, III, DECEASED,
SYNOVUS TRUST COMPANY, SUCCESSOR EXECUTOR TO
SECURITY BANK AND TRUST COMPANY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14929-96. Filed September 16, 1998.
D died testate on Feb. 19, 1992. At the time of
his death, D owned a 3,489-acre parcel of real property
(CMP), which was used to produce merchantable timber
and crops and as a hunting preserve. P borrowed funds
from D's insurance trust for purposes of paying Federal
and State estate taxes and for the maintenance of CMP
pending the resolution of this dispute.
On a timely filed Federal estate tax return, P
reported the value of CMP at its fair market value
(FMV). P also made a valid protective election for
special use valuation of CMP under sec. 2032A, I.R.C.
In addition, P deducted the interest incurred on the
borrowed funds from the value of D's gross estate as an
administrative expense under sec. 2053(a)(2), I.R.C.
On a timely filed amended estate tax return, P
claimed that it is entitled to a refund for overpayment
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