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In sum, since the personal representative's fee is to be
paid from the residue, which is principal of the estate, such
payment reduces the marital deduction under section 2056. See
Estate of Fine v. Commissioner, 90 T.C. 1068 (1988), affd.
without published opinion 885 F.2d 879 (11th Cir. 1989) (marital
deduction is reduced where administration expenses are paid from
the residuary estate under the terms of the will); Estate of
Dawson v. Commissioner, 62 T.C. 315 (1974) (marital deduction is
reduced where administration expenses are paid from the residue
on the basis of state law); Estate of Roney v. Commissioner, 33
T.C. 801 (1960), affd. per curiam 294 F.2d 774 (5th Cir. 1961)
(same); Empire Trust Co. v. United States, supra.
Petitioner's reliance on Estate of Hubert v. Commissioner,
supra, and Estate of Allen v. Commissioner, 101 T.C. 351 (1993),
is misplaced. Both those cases involved will and statutory
provisions pursuant to which administration expenses were to be
paid out of income. By way of contrast, the foundation of our
conclusion herein is that the will and statutory provisions
mandated that such expenses be paid out of principal. Thus,
Estate of Hubert and Estate of Allen are clearly distinguishable.
Estate of Street v. Commissioner, 974 F.2d 723 (6th Cir. 1992),
affg. in part, revg. in part, and remanding T.C. Memo. 1988-553,
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