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administration expenses. The estate contends that a reasonable
estimate satisfies the requirement of section 2053 that expenses
be necessary for the administration of the estate because (a)
only an estimate of the amount of the loan was possible when the
estate obtained the loan, and (b) the estate’s obligation to pay
the $38 million loan and interest thereon is fixed. Thus, the
estate contends, it may deduct the interest on that portion of
the loan to be used to pay miscellaneous expenses of $816,175.
We disagree because the record does not show what expenses are
included in the $816,175 amount. Thus, these expenses may no
more be estate expenses than was the compensation for Bergreen
and Davis. See paragraph A-2, above.
4. Whether the Estate Was Illiquid When It Borrowed Funds
From Farm Credit
Respondent contends that, after the estate paid the cash
bequests in May 1998, it had enough liquid assets with which to
pay its estate taxes and administration expenses and thus did not
need the Farm Credit loan. We disagree.
After payment of the cash bequests and before the
restructuring, the estate had more than enough assets to pay
administration expenses and Federal and State estate taxes.
However, these assets were illiquid. Every witness, including
respondent’s witnesses Rossellini, Justin Feldman, and John J.
Kennedy (all of whom were independent directors on the board of
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