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expenses at issue were actually incurred. Expenses necessarily
incurred to preserve or distribute the estate are deductible.
Sec. 20.3053-3(d)(1), Estate Tax Regs. Necessarily incurred
expenses include the cost to store or maintain property if it is
impossible to distribute that property immediately to the
beneficiaries. Id. An estate may not deduct expenses for a
longer period than the executor reasonably needs to retain the
property. Id. Expenses that are not essential to the proper
settlement of the estate, but are incurred for the individual
benefit of heirs, legatees, or devisees may not be deducted.
Sec. 20.2053-3(a), Estate Tax Regs.
Expenses to sell estate property are deductible only "if the
sale is necessary in order to pay the decedent's debts, expenses
of administration, or taxes, to preserve the estate, or to effect
distribution." Sec. 20.2053-3(d)(2), Estate Tax Regs.
B. Burdens of Proof
Respondent determined in the notice of deficiency that the
value of Ripplestone was $3.7 million. The estate deducted more
5(...continued)
attend the settlement of an estate and the transfer of
the property of the estate to individual beneficiaries
or to a trustee * * *. Expenditures not essential to
the proper settlement of the estate, but incurred for
the individual benefit of the heirs, legatees, or
devisees, may not be taken as deductions. * * *
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