- 17 - In Coffee v. Ruffin, 44 Tenn. 487 (1867), the executor was granted broad powers under the will. During the administration of the will, the executor borrowed money at usurious rates of interest to prevent a sacrificial sale of the real estate. The court credited the executor for the usurious interest paid, noting the broad discretion conferred upon the executor by the will to borrow money, even at usurious rates, and to charge the estate with that interest. In Allen v. Shanks, 90 Tenn. 359, 16 S.W. 715 (1891), the executor borrowed money without express authorization. Because the money was used to benefit the estate, however, the court credited the executor for legal interest paid on the loan, but it refused to credit the usurious percentage of the interest. As the Coffee and Ruffin [sic Allen] courts credited interest as a cost of administration under those circumstances, likewise, interest should be a proper expense of administration when specifically authorized by the terms of the will, as in the present case. Interest is simply the cost of using money, and there should be no differentiation for purposes of deductibility whether the interest is paid on taxes or on money borrowed to pay the taxes. Estate of Bahr v. Commissioner, 68 T.C. 74 (1974); * * * [Id. at 202; emphasis added.] Under Tennessee law, the incorporation in a will of the statutory power set forth in Tenn. Code Ann. sec. 35-50-110(8) authorizes an executor to borrow funds and provides that a Tennessee court will credit an executor for interest necessarily and properly incurred on loans. Decedent incorporated by reference the provisions contained in Tenn. Code Ann. sec. 35-50- 110 into her will. Respondent would distinguish Cleveland Bank and Trust Co. v. Olsen, supra, on the grounds that in that case the incorporation of the statutory power to borrow was not restricted by limiting language in the will. In the instant case, the incorporation ofPage: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
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