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Provident. The Company repaid its note to decedent's estate on
January 15, 1993, at which time the estate also repaid the
Provident Loan. Respondent asserts that the elimination of a
claimed expense should also eliminate its deductibility, citing
Estate of Street v. Commissioner, 974 F.2d 723 (6th Cir. 1992),
affg. in part and revg. in part T.C. Memo. 1988-553. We
disagree.
Respondent contends that the interest incurred on the
Provident Loan during the post mortem period in which the Company
paid the exact amount of interest on its notes to decedent's
estate had no negative impact on the net estate. Respondent
quotes the following passage from Estate of Street to support her
position: "'To pay the interest on the deferred taxes out of
income of the estate would neither increase nor decrease the
principal of the estate as it was at the time of decedent's
death.'" Id. at 727-728 (quoting Estate of Richardson v.
Commissioner, 89 T.C. 1193, 1205 (1987)). The issue in Estate of
Street was whether the marital deduction has to be reduced by
interest on deferred taxes and other administration expenses that
were paid out of the income generated by the marital share of the
estate. Explaining the meaning of the Estate of Richardson
decision, the Court of Appeals in Estate of Street stated:
"Therefore, Estate of Richardson stands only for the proposition
that the payment, from income, of interest on inheritance and
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