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required in order to pay the debts of the Grantor, his
funeral expenses, cost of Grantor's last illness and
any other expenses of the administration of his estate.
On decedent's Federal estate tax return, the executor
reported a gross estate of $5,037,386. The value of the assets
contained in the trust and included in the gross estate was
stated as $2,417,846. Stocks and bonds owned by decedent were
reported at a value of $1,550,615. The gross estate included
$242,301 in proceeds from life insurance policies on decedent's
life, owned by and payable to the trust as beneficiary. The
trust was also the beneficiary of annuities totaling at least
$300,000. Additionally, the estate reported real estate,
mortgages, notes, bank accounts, and other miscellaneous assets
valued at more than $500,000. The executor reported four
charitable bequests totaling $2,929,683, three-fifths of the
estate's residue. No taxes were listed as being payable out of
this property. The estate reported and paid a tax of $166,818.
Respondent determined that the total amount of the
charitable bequests should be reduced by $150,142 for a portion
of the estate's Federal and State taxes. On brief, respondent
concedes that, due to a mathematical error, the adjustment should
have been only $147,791.
Discussion
Section 2055(a) allows a deduction from the value of the
gross estate for the value of charitable bequests. Section
2055(c) provides that, if the Federal estate tax,
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