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Estate and Gift Tax

Proposed Regs Provide Guidance on Determining Estates’ Deductions

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

The IRS has issued proposed regs that provide guidance on the proper use of present-value principles in determining the amount deductible by an estate for funeral expenses, administration expenses, and certain claims against the estate under Code Sec. 2053. In addition, the proposed regs provide guidance on the deductibility of interest expense accruing on tax and penalties owed by an estate, and interest expense accruing on certain loan obligations incurred by an estate. The proposed regs also amend and clarify the requirements for substantiating the value of a claim against an estate that is deductible in certain cases. Finally, the proposed regs provide guidance on the deductibility of amounts paid under a decedent’s personal guarantee.

The proposed regs would generally be applicable to the estates of decedents dying on or after the date the regs are published as final regs.

For an estate’s deductible expenses, debts, and taxes, see here.

 

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