3
administration expenses taken as a deduction on its fiduciary
income tax return, Form 1041. Respondent determined that under
the language of the will, those administration expenses must be
subtracted in arriving at the residuary estate (thereby reducing
the marital deduction by an equal amount). In the alternative,
because there was a residuary marital share, respondent
determined that payment of administration expenses from estate
income (or the grant of discretion to make such payment) should
decrease the marital share in an equal amount to represent the
decrease in total value passing to the spouse.
The alternative determination by respondent presents
essentially the same issue2 as heard before the Supreme Court in
Estate of Hubert v. Commissioner, 101 T.C. 314 (1993), affd. 63
F.3d 1083 (11th Cir. 1995), cert. granted 517 U.S. , 116 S. Ct.
1564 (1996), argued November 10, 1996. Because the decision in
that case may be controlling as to this argument, we shall not
decide that issue at this time. Rather, we shall preserve and
decide it after a decision in Estate of Hubert is handed down.
Thus, there are two issues presently to decide in this case.
The first is whether under the language of the will, $90,000 was
2 Petitioner and respondent agreed, and the Court entered a
decision in Estate of Southern v. Commissioner, docket No. 2248-
95 (Aug. 21, 1995), that deduction of the administration expenses
from the estate income on the fiduciary income tax return of
decedent's estate was proper. Thus, the issue for decision here
will be whether the marital deduction must be reduced in the case
of a residuary marital bequest where administrative expenses have
been properly taken on the fiduciary income tax return.
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