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addition, interest attributable to a State death tax or Federal
estate tax deficiency may be deductible as an administration
expense under section 2053. Estate of Bahr v. Commissioner, 68
T.C. 74 (1977).
At the trial, petitioner did not substantiate any additional
administration expenses the estate had paid or incurred since
filing its estate tax return. However, we do not doubt that the
estate has paid or incurred additional administration expenses
that are allowable as deductions if substantiated. Petitioner
should promptly submit documentation of any additional
administration expenses to respondent, and the parties should
attempt to reach an agreement regarding this issue. If the
parties are unable to do so, we shall decide the issue as
appropriate in a Rule 155 or 156 proceeding.
VIII. Whether the Estate Is Entitled To Deduct ad Valorem Tax
The estate claimed a deduction of $1,543 for ad valorem tax
on Schedule K of Form 706, which respondent disallowed.
Petitioner now maintains that the estate is entitled to deduct
$3,367, the full amount of ad valorem tax owed for 1997, under
section 2053(a)(3). Respondent argues the estate is not allowed
to deduct any of decedent’s ad valorem tax because petitioner has
not established that the tax was a personal obligation of
decedent on the date of her death that met the requirements for
deductibility under section 2053.
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