Cite as: 520 U. S. 93 (1997)
Scalia, J., dissenting
tration expenses, the estate will be required to pay an estate tax on some $5 million even though the entire estate passed to the spouse. The plurality's test creates taxable estates where none exist. The proper result under § 2056(b)(4)(B) and § 20.2056(b)-4(a) is that the marital deduction is $30 million and the estate pays no estate tax.
I have one final concern with the plurality's approach: It effectively permits an estate to obtain a double deduction from tax for administration expenses, a tax windfall which Congress could never have intended. Title 26 U. S. C. § 642(g) provides that administration expenses, which are allowed as a deduction in computing the taxable estate of a decedent, see § 2053, may be deducted from income (provided they fall within an income tax deduction) if the estate files a statement with the Commissioner stating that such amounts have not been taken as deductions from the gross estate. Here, respondent elected to deduct some $1.5 million of its administration expenses on its fiduciary income tax returns and was prohibited from taking these expenses as a deduction from the gross estate. Notwithstanding § 642(g), however, the plurality's holding effectively permits respondent to deduct the $1.5 million of administration expenses on the estate tax return under the guise of a marital or charitable deduction. Of course, the estate could have avoided the estate tax by electing to deduct its administration expenses on its estate tax return, but then it would have had no income tax deduction; Congress gave estates a choice, not a road map to a double deduction. I recognize that nothing in § 642(g) compels the conclusion that the marital (or charitable) deduction must be reduced whenever an estate elects to deduct expenses from income. However, by enacting § 642 to prohibit a double deduction, Congress seemingly anticipated that if an estate elected to deduct administration expenses against income, its potential estate tax liability would increase commensurately. The plurality's holding today defeats this expectation.
137
Page: Index Previous 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 NextLast modified: October 4, 2007