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(1) Whether the amount included in the gross estate as a
bequest from Viola K. Fagan should be increased to restore
amounts incurred for administrative expenses of her estate; and
(2) whether the amount of the charitable deduction should be
reduced by Federal estate and State inheritance taxes.
This case was submitted fully stipulated pursuant to Rule
122. Unless otherwise indicated, all section references are to
the Internal Revenue Code as in effect as of the date of
decedent's death, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
The stipulated facts are incorporated herein by this
reference. Harry Fagan, Jr. (decedent), died on May 3, 1993, a
resident of Wake County, North Carolina. The executor of
decedent's estate is First Citizens Bank, the principal office of
which was located in Raleigh, North Carolina, at the time of the
filing of the petition.
Issue 1. Bequest From Viola K. Fagan
Background
Decedent was predeceased by his mother, Viola K. Fagan
(Mrs. Fagan), who died on March 5, 1992, a resident of North
Carolina. A portion of her estate passed to decedent under her
will. Pertinent excerpts from Mrs. Fagan's will are as follows:
ARTICLE I
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