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of Federal estate tax. In that connection, P attempted
to perfect its sec. 2032A, I.R.C., protective election
with respect to approximately 2,929.1 acres of
timberland located on CMP for which a "qualified
woodlands" election had been made under sec.
2032A(e)(13), I.R.C. P also increased the amount of
its interest expense deduction under sec. 2053(a)(2),
I.R.C.
R disallowed the sec. 2053(a)(2), I.R.C.,
interest expense deduction in its entirety, on the
grounds that Georgia law requires prior court approval
for the executor to borrow funds and that the interest
expense was not "necessarily" incurred for the
administration of the estate within the meaning of sec.
20.2053-3, Estate Tax Regs. R accepted the FMV of CMP
as reported on the original estate tax return.
1. Held: P failed to supply the information and
documentation necessary under sec. 2032A(e)(7)(A) and
secs. 20.2032A-4(b)(2) and -8(a)(3), Estate Tax Regs.,
to perfect its protective election for special use
valuation with respect to the subject property;
therefore, P is required to value CMP at its undisputed
FMV on the date of decedent's death; i.e., $2,882,000.
Sec. 2031(a), I.R.C.; Estate of Strickland v.
Commissioner, 92 T.C. 16 (1989), followed.
2. Held, further, P is entitled to deduct as an
administrative expense under sec. 2053(a)(2), I.R.C,
interest incurred on the funds borrowed from D's
insurance trust.
Robert H. Hishon, for petitioner.
Clinton M. Fried, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
NIMS, Judge: Respondent determined a deficiency of $101,192
in the Federal estate tax of the Estate of Lewis S. Thompson, III
(petitioner).
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