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whether the expenses are allowable under Florida law requires a
determination similar to the Federal test of necessity. We
therefore turn to the question of whether the expenses satisfy
the Federal test of necessity to preserve the estate, as provided
by section 20.2053-3(d)(2), Estate Tax Regs.
In certain circumstances, an estate's expenses of operating
a business are regarded as necessary for the preservation of the
estate and may therefore be deducted on the Federal estate tax
return. In Estate of Brewer v. Commissioner, a Memorandum
Opinion of the Board of Tax Appeals dated Dec. 26, 1941, the
estate owned a farm that raised cattle and chickens. The
executors decided that the best way to dispose of the farm was
not to hold an auction sale but to sell the animals from time to
time at the best prices they could obtain. Judge Sternhagen
relied on Adams v. Commissioner, 110 F.2d 578 (8th Cir. 1940),
vacating and remanding a Memorandum Opinion of the Board of Tax
Appeals dated Jan. 11, 1939, to hold that the expenses of
continuing to operate the farm were necessary for the executors
to make the most advantageous sales of the livestock and poultry.
As such, the expenses were a "necessary incident of liquidation",
and the deductions claimed for farm operations expenses were
allowed.
In Adams v. Commissioner, supra, the estate consisted of
real estate, mining leases, and mineral properties located in
three different States. After decedent's death, the estate
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