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deferred estate tax, which the estate deducted as an
administration expense on the estate tax return. The
Commissioner disallowed the deduction on the ground that interest
on a tax was the same as the tax itself, which was not deductible
as an administration expense. The Court held that the interest
expenses claimed by the estate were deductible as an
administration expenses. The Court stated: "It is well settled
that an estate may borrow money from a private lender to satisfy
its Federal estate tax liability and deduct the interest incurred
on the debt as an administration expense under section
2053(a)(2)." Id. at 82.
Decedent's estate relies on Estate of Huntington v.
Commissioner, supra, which involved the deductibility of
discounts, expenses, and premiums related to the issuance and
retirement of notes issued by a decedent's estate. In Estate of
Huntington, the estate was composed of assets that included
closely held business interests and large parcels of real estate.
A short time before the Federal estate tax return was due, the
executors filed a petition with a California court for authority
to issue unsecured 5-year 6-percent notes of the estate in the
face amount of $9,500,000, and to sell these notes for a price of
96 percent of their face value and, further, to redeem them prior
to maturity pursuant to a schedule of premiums set forth in the
petition. We noted that "The issuance of the notes avoided the
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