- 16 - the estate’s principal assets to the foundation in the restructuring; (d) the estate should have retained enough assets to sell to pay its expenses; (e) the executors had elected to pay the estate tax in 10 annual installments; and (f) the executors could have demanded that the foundation return some of the proceeds from HG’s sale of assets transferred from the estate. The estate disputes respondent’s contentions. An estate may deduct administration expenses allowable under the probate law of the jurisdiction where the estate is being administered, sec. 2053(a)(2), and which are actually and necessarily incurred in administering a decedent’s estate, Estate of Grant v. Commissioner, 294 F.3d 352, 353 (2d Cir. 2002), affg. T.C. Memo. 1999-396; sec. 20.2053-3(a), Estate Tax Regs.9 Interest on funds borrowed to pay taxes or other debts of the estate while the estate is illiquid (i.e., while the estate 9 Sec. 20.2053-3(a), Estate Tax Regs., provides in part: The amounts deductible from a decedent’s gross estate as “administration expenses” * * * are limited to such expenses as are actually and necessarily incurred in the administration of the decedent's estate; that is, in the collection of assets, payment of debts, and distribution of property to the persons entitled to it. The expenses contemplated in the law are such only as attend the settlement of an estate and the transfer of the property of the estate to individual beneficiaries or to a trustee * * *. Expenditures not essential to the proper settlement of the estate, but incurred for the individual benefit of the heirs, legatees, or devisees, may not be taken as deductions.Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
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