- 68 -
B. Uncertainty That Land Bank Loan Will Ever Be Paid by
Decedent's Estate
An item may be deducted under section 2053 even if its exact
amount is not known, provided it is ascertainable with reasonable
certainty, and will be paid. See sec. 20.2053-1(b)(3), Estate
Tax Regs. However, no deduction may be taken on the basis of a
vague or uncertain estimate, or for a debt that will not in fact
be paid. See id.; Estate of Courtney v. Commissioner, supra at
319-323.
As Donald Hendrickson testified at trial, if decedent had
paid more than her allocable share of the Land Bank loan, she
would have been entitled to seek contribution from her co-
obligors. As explained below, the value of decedent's
contribution rights must be taken into account in determining the
allowable amount of petitioner's deduction for the Land Bank
loan. However, under the circumstances of this case, petitioner
has not established (and it is impossible for us to determine)
the value of those contribution rights. For this reason (and the
other reasons discussed below), it is impossible to estimate
petitioner's liability for the Land Bank loan with reasonable
certainty, and no deduction is allowed.
1. Petitioner's Section 2053 Deduction Must Be Reduced on
Account of Decedent's Contribution Rights
Decedent individually was but one of eight parties who were
jointly and severally liable for repayment of the Land Bank loan.
Page: Previous 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 NextLast modified: May 25, 2011