Estate of Delores E. Lasarzig, Deceased, Wells Fargo Bank, Trustee - Page 6




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          positions.  Petitioner’s argument is that the circumstances of              
          this case should logically be allowed as a natural extension of             
          the existing precedent.  Respondent’s argument is that the                  
          interest being paid here is not being incurred in the                       
          administration of the estate and, in addition, that petitioner              
          has not shown that it is allowable under local law.                         
               The parties agree that the interest here is an otherwise               
          nondeductible personal obligation that could not have been                  
          claimed by the trustee/beneficiaries or their respective family             
          trusts, which obtained the loan.  Both parties also agree that,             
          under appropriate circumstances, an otherwise nondeductible                 
          interest expense may be deductible as an administration expense             
          in an estate tax setting.  Finally, respondent also agrees that             
          “an estate may [,under certain circumstances,] borrow money from            
          a private lender to satisfy its Federal estate tax liability and            
          deduct the interest on the debt as an administration expense                
          under section 2053”.  Accordingly, we consider whether the                  
          interest paid is deductible under section 2053.  If we decide               
          that the interest is deductible, then we must decide whether it             
          would be appropriate to permit this proceeding to be stayed for             
          as long as 20 years to permit the payment and deduction of the              
          interest before entry of a decision.                                        
               To be deductible under section 2053, expenditures must be              
          actually and necessarily incurred in the administration of the              





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