11-1.2 Tax elections by personal representatives(A) If the personal representative or other person acting in a fiduciary capacity with respect to a decedent's estate, hereinafter called the "fiduciary", claims as income tax reductions administration expenses chargeable to principal that may be claimed by such fiduciary as either estate tax deductions or as income tax deductions with the result that the income taxes paid by or chargeable to income or to any income beneficiary are reduced and with the further result that United States or New York estate taxes chargeable to principal are increased, then, unless otherwise provided or authorized by the decedent's will, each person, including the estate or any trust, who has received the use of such income tax deductions shall reimburse to the principal chargeable with such increased estate taxes an amount determined by multiplying such increase in estate taxes by a fraction having a numerator equal to the income tax deduction made available to him as the result of the aforesaid election and a denominator equal to the total amount of the income tax deductions made available thereby.
(b) Unless otherwise expressly provided by a will under which a disposition is made to or for the benefit of the surviving spouse of a decedent which qualifies for an estate tax marital deduction under any tax law of the state of New York or of the United States and the amount or size of such disposition is defined by the will in terms of the maximum marital deduction allowable under such tax law:
(1) No adjustment shall be required to be made between such disposition and the other interests in the decedent's estate by reason of (A) any increase in the amount or size of such disposition resulting from any election by the fiduciary, under such tax laws, to treat estate administration expenses as income tax deductions over the amount or size of such disposition had the contrary election been made or (B) any increase or decrease in the amount or size of such disposition resulting from an election by the fiduciary, under such tax laws, of an estate tax valuation date other than the date of the decedent's death as compared with the amount or size of such disposition had the contrary election been made.
(2) Such definition shall not be construed as a direction by the decedent to the fiduciary to exercise any election respecting the deduction of estate administration expenses or the determination of the estate tax valuation date, which the fiduciary may have under such tax laws, only in such manner as will result in a larger allowable estate tax marital deduction than if the contrary election had been made.
Last modified: February 3, 2019