Cite as: 520 U. S. 93 (1997)
Opinion of Kennedy, J.
The estate did not include in its marital and charitable deductions the amount of residue principal used to pay administration expenses. The parties here have agreed throughout that the marital or charitable deductions could not include those amounts. The estate, however, did not reduce its marital or charitable deductions by the amount of the income used to pay the balance of the administration expenses. The Commissioner disagreed and contended that use of income for this purpose required a dollar-for-dollar reduction of the amounts of the marital and charitable deductions.
In a reviewed opinion, the Tax Court, with two judges concurring in part and dissenting in part, rejected the Commissioner's position. 101 T. C. 314 (1993). The court noted it had resolved the same issue against the Commissioner in Estate of Street v. Commissioner, 56 TCM 774, 57 TCM 2851 (1988), ¶ 88,553 P-H Memo TC. The Court of Appeals for the Sixth Circuit had reversed this aspect of Estate of Street, see 974 F. 2d 723, 727-729 (1992), but in the instant case the Tax Court adhered to its view and said, given all the circumstances here, no reduction was required by reason of the executors' power, or the exercise of their power, to pay administration expenses from income. The Court of Appeals for the Eleventh Circuit affirmed the Tax Court, adopting the latter's opinion and noting the resulting conflict with the Sixth Circuit's decision in Street and with the Court of Appeals for the Federal Circuit's decision in Burke v. United States, 994 F. 2d 1576, cert. denied, 510 U. S. 990 (1993). See 63 F. 3d 1083, 1084-1085 (CA11 1995). We granted certiorari, 517 U. S. 1166 (1996), and, in agreement with the Tax Court and the Court of Appeals for the Eleventh Circuit, we now affirm the judgment.
II
A necessary first step in calculating the taxable estate for federal estate tax purposes is to determine the property in-
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