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April 30, 1993. This included approximately 30 hours of work
performed in connection with the sale of decedent's residence
which was specifically devised to Ms. Groetzinger. Also included
was approximately 11 hours of work performed to obtain advance
payment of executor's commissions of $184,500 each to Mr. Baird
and Ms. Groetzinger. On May 24, 1993, the Monroe County
Surrogate issued a Decree of Judicial Settlement allowing the
entire $368,100 in requested attorney's fees.
On January 17, 1995, a statutory notice of deficiency was
timely mailed to petitioner. Respondent disallowed $265,600 of
petitioner's claimed deduction for attorney's fees.
As of May 30, 1996, HBW had performed 555.7 hours of work on
behalf of the estate. This amount included 269 hours devoted to
the controversy with the Internal Revenue Service over the
subject matter of this case.
OPINION
Section 2053(a)(2) allows a deduction from the gross estate
for administration expenses. Administration expenses include
attorney's fees. Sec. 20.2053-3(a), Estate Tax Regs. To be
deductible under section 2053(a)(2), the administration expense
must be allowable under (1) local law and (2) the regulations.
Estate of Reilly v. Commissioner, 76 T.C. 369, 372 (1981); Estate
of Smith v. Commissioner, 57 T.C. 650, 661 (1972), affd. 510 F.2d
479 (2d Cir. 1975); Estate of Love v. Commissioner, 923 F.2d 335,
337-338 (4th Cir. 1991), affg. T.C. Memo. 1989-470. Petitioner
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