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[of deductions set forth in section 20.2053-1(a)(1),
Estate Tax Regs.]) are applied in determining the
extent to which trustee’s commissions, attorney’s and
accountant’s fees, and miscellaneous administration
expenses are allowed in connection with the administra-
tion of property not subject to claims.
Section 20.2053-1(b)(2), Estate Tax Regs., relating to the
effect of a local court decree on expenses claimed under section
2053(a) and (b) provides in pertinent part:
(2) Effect of court decree. The decision of a
local court as to the amount and allowability under
local law of a claim or administration expense will
ordinarily be accepted if the court passes upon the
facts upon which deductibility depends. * * * If the
decree was rendered by consent, it will be accepted,
provided the consent was a bona fide recognition of the
validity of the claim (and not a mere cloak for a gift)
and was accepted by the court as satisfactory evidence
upon the merits. It will be presumed that the consent
was of this character, and was so accepted, if given by
all parties having an interest adverse to the claimant.
The decree will not be accepted if it is at variance
with the law of the State; as, for example, an allow-
ance made to an executor in excess of that prescribed
by statute. * * *
In determining the deductibility of expenses under section
2053, the deductions claimed must be allowable not only by the
State law under which the estate is administered but also by
Federal law. See Estate of Grant v. Commissioner, 294 F.3d 352,
354 (2d Cir. 2002), affg. T.C. Memo. 1999-396; Estate of Love v.
Commissioner, 923 F.2d 335, 337 (4th Cir. 1991), affg. T.C. Memo.
1989-470; Estate of Posen v. Commissioner, 75 T.C. 355, 367
(1980).
We reject the estate’s argument that the June 29, 2001 order
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