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We take the underscored language above to mean that an
executor need not petition the probate court judge for permission
to borrow funds if a decedent's will otherwise invests the
executor with such authority. In this case, Item Ten of
decedent's will unequivocally states that the executor may borrow
money without a court order "for any purpose that the fiduciary
may deem proper." We therefore conclude that the interest
incurred on the borrowed funds is an allowable administration
expense under Georgia law. See Estate of Todd v. Commissioner,
supra at 295 n.4.
We must now consider whether interest on the Note was
"necessarily incurred in the administration of the decedent's
estate." Sec. 20.2053-3(a), Estate Tax Regs.; see Estate of Todd
v. Commissioner, supra; McKee v. Commissioner, supra.
Petitioner argues that, without the borrowed funds, the
estate would have been required to exhaust all of its liquidity
to pay its estate taxes and, even then, a shortfall would have
remained. Moreover, no funds would have been left to provide for
the ongoing costs of maintenance and preservation of Cane Mill
until such time as that asset could be distributed to decedent's
heirs. Thus, petitioner asserts, the interest expense was
necessary and appropriate in the fiduciary's administration of
the estate.
Respondent, on the other hand, argues that the estate held
sufficient liquid assets from which its Federal and State estate
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