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was zero. The claimed deductions incorporated $10,573.35 from
Schedule J, Funeral Expenses and Expenses Incurred In
Administering Property Subject to Claims. The funeral expenses
included $3,638.92 for “Funeral luncheon”, and the administration
expenses included $1,451.25 labeled as “Wayne County Probate
Court”.
The Form 706 was subsequently examined by the Internal
Revenue Service (IRS). During the ensuing audit process, a
representative of the estate provided the examiner with a copy of
an inventory prepared for the Wayne County Probate Court. The
inventory had been signed by decedent’s parents on February 14,
2001, and was apparently filed with the probate court on March 9,
2001, accompanied by payment of a $1,331.25 inventory fee. The
inventory reflected the estate’s interest in the Allstate and
Safeco annuities at a value of $1,118,000. Later, the estate
provided the examiner with two amended inventories that excluded
the value of the annuities.
On June 10, 2004, the IRS issued to the estate a statutory
notice determining the aforementioned deficiency of $507,103.
The determined deficiency was based upon the inclusion in the
gross estate of the Allstate and Safeco annuities at a combined
value of $1,514,572 and the disallowance of the $3,639 (rounded)
for the funeral luncheon. The estate timely petitioned this
Court for redetermination.
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Last modified: May 25, 2011