- 25 - that no claim "shall be made against any life insurance beneficiary for payment of any part of such [estate] taxes." See Estate of Papson v. Commissioner, 73 T.C. 290, 297 n.7 (1979). Even if the life insurance proceeds were available, a gap of almost $200,000 remained between liquid assets and estate tax liabilities. Although respondent has suggested that the executor could have clearcut merchantable Cane Mill timber to make up the difference, Dorough testified that this fairly drastic measure would not have supplied the estate with the necessary amount of funds, and he did not consider this course of action advisable. In addition to its estate tax liabilities, Dorough testified that the estate had other obligations, including liability for property taxes, the salaries of two regular employees, and the wages of occasional laborers, all of which required the retention of a certain amount of liquidity pending the resolution of the instant dispute, inasmuch as the estate itself did not generate sufficient income to maintain the Cane Mill operations. This Court stated in Estate of Sturgis v. Commissioner, T.C. Memo. 1987-415 that "we are not prepared to second guess the judgments of a fiduciary not shown to have acted other than in the best interests of the estate." The same sentiment holds sway in the instant case; the regulations under section 2053 do not require that an estate totally deplete its liquid assets before an interest expense can be considered necessary.Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
Last modified: May 25, 2011