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decedent's will) in full satisfaction of his claim against
decedent's estate. Pursuant to the settlement agreement, Daniel
recognized that the settlement payment he received was for
services rendered and agreed to treat the settlement payment
received as compensation. As required by law for a payor of
miscellaneous income, the executors furnished a Form 1099 to
Daniel.
The estate's respective payments of $400,000 to David and
$550,000 to Daniel were triggered solely by the results of the
judicial and mediation proceedings described above and for no
other reason.
Discussion
The issue for decision is whether decedent's estate may
deduct the claims of David and Daniel Griffith in the amounts
paid to them pursuant to the settlement of their claims.2
Section 2053 allows an estate tax deduction for claims
against the estate that are allowable by the laws of the
jurisdiction in which the estate is being administered. Section
2053 seeks to distinguish between claims based upon obligations
2Respondent does not appear to be contesting the
deductibility of $75,000 of each of the payments that was made to
David and Daniel. Respondent argues that the deductions are
limited to $75,000 of each payment, because that was the value
that the jury placed on the services that were actually rendered
by David. Respondent argues that Daniel's services should be
given a similar value.
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Last modified: May 25, 2011