- 8 -
of the decedent or of the estate, as compared to bequests and
legacies. First Natl. Bank of Amarillo v. United States, 422
F.2d 1385, 1386 (10th Cir. 1970). To be deductible, the claim
must represent a personal obligation of the decedent at the time
of death. Section 2053(c)(1)(A) places a limitation on the type
of claims at issue in this case by providing:
(A) Consideration for claims.--The deduction
allowed by this section in the case of claims against
the estate, * * * shall, when founded on a promise or
agreement, be limited to the extent that they were
contracted bona fide and for an adequate and full
consideration in money or money's worth; * * *
Section 2053(c)(1)(A) is mirrored by the provisions of section
20.2053-4, Estate Tax Regs.
The purpose of the "adequate and full consideration"
requirement is to prevent the depletion of the estate by the use
of agreements which would ultimately serve to avoid the estate
tax. Bank of New York v. United States, 526 F.2d 1012, 1016 (3d
Cir. 1975); see Estate of Hartshorne v. Commissioner, 402 F.2d
592, 594 n.2 (2d Cir. 1968); Latty v. Commissioner, 62 F.2d 952,
953-954 (6th Cir. 1933). Thus, claims based upon promises or
agreements must be "contracted for a consideration which at the
time either augmented the estate of the decedent, granted to him
some right or privilege he did not possess before, or operated to
discharge a then existing claim". Latty v. Commissioner, supra
at 954. Furthermore, under the statute, some consideration is not
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011