---
kind: "range"
citation: "26 C.F.R. §§ 20.2053-2–20.2053-10"
title: "26"
from: "20.2053-2"
to: "20.2053-10"
count: 9
url: "https://uscodex.org/cfr/26/20.2053-2..20.2053-10"
---

# §20.2053-2. Deduction for funeral expenses.


Such amounts for funeral expenses are allowed as deductions from a decedent's gross estate as (a) are actually expended, (b) would be properly allowable out of property subject to claims under the laws of the local jurisdiction, and (c) satisfy the requirements of [paragraph (c)](/cfr/26/20.2053-1.md?p=c) of § 20.2053-1. A reasonable expenditure for a tombstone, monument, or mausoleum, or for a burial lot, either for the decedent or his family, including a reasonable expenditure for its future care, may be deducted under this heading, provided such an expenditure is allowable by the local law. Included in funeral expenses is the cost of transportation of the person bringing the body to the place of burial.


# §20.2053-3. Deduction for expenses of administering estate.

- (a) **In general.** The amounts deductible from a decedent's gross estate as “administration expenses” of the first category (see paragraphs [(a)](/cfr/26/20.2053-1.md?p=a) and [(c)](/cfr/26/20.2053-1.md?p=c) of § 20.2053-1) are limited to such expenses as are actually and necessarily, incurred in the administration of the decedent's estate; that is, in the collection of assets, payment of debts, and distribution of property to the persons entitled to it. The expenses contemplated in the law are such only as attend the settlement of an estate and the transfer of the property of the estate to individual beneficiaries or to a trustee, whether the trustee is the executor or some other person. Expenditures not essential to the proper settlement of the estate, but incurred for the individual benefit of the heirs, legatees, or devisees, may not be taken as deductions. Administration expenses include (1) executor's commissions; (2) attorney's fees; and (3) miscellaneous expenses. Each of these classes is considered separately in [paragraphs (b) through (d)](#b..d) of this section.
- (b) **Executor's commissions.**
  - (1) Executors' commissions are deductible to the extent permitted by [§ 20.2053-1](/cfr/26/20.2053-1.md) and this section, but no deduction may be taken if no commissions are to be paid. In addition, the amount of the commissions claimed as a deduction must be in accordance with the usually accepted standards and practice of allowing such an amount in estates of similar size and character in the jurisdiction in which the estate is being administered, or any deviation from the usually accepted standards or range of amounts (permissible under applicable local law) must be justified to the satisfaction of the Commissioner.
  - (2) **A bequest or devise to the executor in lieu of commissions is not deductible.** If, however, the terms of the will set forth the compensation payable to the executor for services to be rendered in the administration of the estate, a deduction may be taken to the extent that the amount so fixed does not exceed the compensation allowable by the local law or practice and to the extent permitted by [§ 20.2053-1](/cfr/26/20.2053-1.md).
  - (3) Except to the extent that a trustee is in fact performing services with respect to property subject to claims which would normally be performed by an executor, amounts paid as trustees' commissions do not constitute expenses of administration under the first category, and are only deductible as expenses of the second category to the extent provided in [§ 20.2053-8](/cfr/26/20.2053-8.md).
- (c) **Attorney's fees—**
  - (1) Attorney's fees are deductible to the extent permitted by [§ 20.2053-1](/cfr/26/20.2053-1.md) and this section. Further, the amount of the fees claimed as a deduction may not exceed a reasonable remuneration for the services rendered, taking into account the size and character of the estate, the law and practice in the jurisdiction in which the estate is being administered, and the skill and expertise of the attorneys.
  - (2) A deduction for attorneys' fees incurred in contesting an asserted deficiency or in prosecuting a claim for refund should be claimed at the time the deficiency is contested or the refund claim is prosecuted. A deduction for reasonable attorney's fees actually incurred in contesting an asserted deficiency or in prosecuting a claim for refund will be allowed to the extent permitted by [§ 20.2053-1](/cfr/26/20.2053-1.md) even though the deduction, as such, was not claimed on the estate tax return or in the claim for refund. A deduction for these fees shall not be denied, and the sufficiency of a claim for refund shall not be questioned, solely by reason of the fact that the amount of the fees to be paid was not established at the time that the right to the deduction was claimed.
  - (3) Attorneys' fees incurred by beneficiaries incident to litigation as to their respective interests are not deductible if the litigation is not essential to the proper settlement of the estate within the meaning of [paragraph (a)](#a) of this section. An attorney's fee not meeting this test is not deductible as an administration expense under [section 2053](/cfr/26/2053.md) and this section, even if it is approved by a probate court as an expense payable or reimbursable by the estate.
- (d) **Miscellaneous administration expenses.**
  - (1) Miscellaneous administration expenses include such expenses as court costs, surrogates' fees, accountants' fees, appraisers' fees, clerk hire, etc. Expenses necessarily incurred in preserving and distributing the estate, including the cost of storing or maintaining property of the estate if it is impossible to effect immediate distribution to the beneficiaries, are deductible to the extent permitted by [§ 20.2053-1](/cfr/26/20.2053-1.md). Expenses for preserving and caring for the property may not include outlays for additions or improvements; nor will such expenses be allowed for a longer period than the executor is reasonably required to retain the property.
  - (2) Expenses for selling property of the estate are deductible to the extent permitted by [§ 20.2053-1](/cfr/26/20.2053-1.md) if the sale is necessary in order to pay the decedent's debts, expenses of administration, or taxes, to preserve the estate, or to effect distribution. The phrase “expenses for selling property” includes brokerage fees and other expenses attending the sale, such as the fees of an auctioneer if it is reasonably necessary to employ one. Where an item included in the gross estate is disposed of in a bona fide sale (including a redemption) to a dealer in such items at a price below its fair market value, for purposes of this paragraph there shall be treated as an expense for selling the item whichever of the following amounts is the lesser: (i) The amount by which the fair market value of the property on the applicable valuation date exceeds the proceeds of the sale, or (ii) the amount by which the fair market value of the property on the date of the sale exceeds the proceeds of the sale. The principles used in determining the value at which an item of property is included in the gross estate shall be followed in arriving at the fair market value of the property for purposes of this paragraph. See [§§ 20.2031-1 through 20.2031-9](/cfr/26/20.2031-1..20.2031-9.md).
  - (3) Expenses incurred in defending the estate against claims described in [section 2053(a)(3)](/cfr/26/2053.md?p=a-3) are deductible to the extent permitted by [§ 20.2053-1](/cfr/26/20.2053-1.md) if the expenses are incurred incident to the assertion of defenses to the claim available under the applicable law, even if the estate ultimately does not prevail. For purposes of this [paragraph (d)(3)](#d-3), “expenses incurred in defending the estate against claims” include costs relating to the arbitration and mediation of contested issues, costs associated with defending the estate against claims (whether or not enforceable), and costs associated with reaching a negotiated settlement of the issues.
- (e) **Effective/applicability date.** This section applies to the estates of decedents dying on or after October 20, 2009.

# §20.2053-4. Deduction for claims against the estate.

- (a) **In general—**
  - (1) **General rule.** For purposes of this section, liabilities imposed by law or arising out of contracts or torts are deductible if they meet the applicable requirements set forth in [§ 20.2053-1](/cfr/26/20.2053-1.md) and this section. To be deductible, a claim against a decedent's estate must represent a personal obligation of the decedent existing at the time of the decedent's death. Except as otherwise provided in paragraphs [(b)](#b) and [(c)](#c) of this section and to the extent permitted by [§ 20.2053-1](/cfr/26/20.2053-1.md), the amounts that may be deducted as claims against a decedent's estate are limited to the amounts of bona fide claims that are enforceable against the decedent's estate (and are not unenforceable when paid) and claims that—
    - (i) Are actually paid by the estate in satisfaction of the claim; or
    - (ii) Meet the requirements of [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4) for deducting certain ascertainable amounts.
  - (2) **Effect of post-death events.** Events occurring after the date of a decedent's death shall be considered in determining whether and to what extent a deduction is allowable under [section 2053](/cfr/26/2053.md). See [§ 20.2053-1(d)(2)](/cfr/26/20.2053-1.md?p=d-2).
- (b) **Exception for claims and counterclaims in related matter—**
  - (1) **General rule.** If a decedent's gross estate includes one or more claims or causes of action and there are one or more claims against the decedent's estate in the same or a substantially-related matter, or, if a decedent's gross estate includes a particular asset and there are one or more claims against the decedent's estate integrally related to that particular asset, the executor may deduct on the estate's United States Estate (and Generation-Skipping Transfer) Tax Return (Form 706) the current value of the claim or claims against the estate, even though payment has not been made, provided that—
    - (i) Each such claim against the estate otherwise satisfies the applicable requirements set forth in [§ 20.2053-1](/cfr/26/20.2053-1.md);
    - (ii) Each such claim against the estate represents a personal obligation of the decedent existing at the time of the decedent's death;
    - (iii) Each such claim is enforceable against the decedent's estate (and is not unenforceable when paid);
    - (iv) The value of each such claim against the estate is determined from a “qualified appraisal” performed by a “qualified appraiser” within the meaning of section 170 of the Internal Revenue Code and the corresponding regulations;
    - (v) The value of each such claim against the estate is subject to adjustment for post-death events; and
    - (vi) The aggregate value of the related claims or assets included in the decedent's gross estate exceeds 10 percent of the decedent's gross estate.
  - (2) **Limitation on deduction.** The deduction under this [paragraph (b)](#b) is limited to the value of the related claims or particular assets included in decedent's gross estate.
  - (3) **Effect of post-death events.** If, under this [paragraph (b)](#b), a deduction is claimed on Form 706 for a claim against the estate and, during the period described in [§ 20.2053-1(d)(2)](/cfr/26/20.2053-1.md?p=d-2), the claim is paid or meets the requirements of [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4) for deducting certain ascertainable amounts, the claimed deduction is subject to adjustment to reflect, and may not exceed, the amount paid on the claim or the amount meeting the requirements of [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4). If, under this [paragraph (b)](#b), a deduction is claimed on Form 706 for a claim against the estate and, during the period described in [§ 20.2053-1(d)(2)](/cfr/26/20.2053-1.md?p=d-2), the claim remains unpaid (and does not meet the requirements of [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4) for deducting certain ascertainable amounts), the claimed deduction is subject to adjustment to reflect, and may not exceed, the current valuation of the claim. A valuation of the claim will be considered current if it reflects events occurring after the decedent's death. With regard to any amount in excess of the amount deductible under this [paragraph (b)](#b), an estate may preserve the estate's right to claim a refund for claims that are paid or that meet the requirements of [§ 20.2053-(1)(d)(4)](/cfr/26/20.2053-.md?p=1-d-4) after the expiration of the period of limitation for filing a claim for refund by filing a protective claim for refund in accordance with the rules in [§ 20.2053-1(d)(5)](/cfr/26/20.2053-1.md?p=d-5).
- (c) **Exception for claims totaling not more than $500,000—**
  - (1) **General rule.** An executor may deduct on Form 706 the current value of one or more claims against the estate even though payment has not been made on the claim or claims to the extent that—
    - (i) Each such claim against the estate otherwise satisfies the applicable requirements for deductibility set forth in [§ 20.2053-1](/cfr/26/20.2053-1.md);
    - (ii) Each such claim against the estate represents a personal obligation of the decedent existing at the time of the decedent's death;
    - (iii) Each such claim is enforceable against the decedent's estate (and is not unenforceable when paid);
    - (iv) The value of each such claim against the estate is determined from a “qualified appraisal” performed by a “qualified appraiser” within the meaning of section 170 of the Internal Revenue Code and the corresponding regulations;
    - (v) The total amount deducted by the estate under this [paragraph (c)](#c) does not exceed $500,000;
    - (vi) The full value of each claim, rather than just a portion of that amount, must be deductible under this [paragraph (c)](#c) and, for this purpose, the full value of each such claim is deemed to be the unpaid amount of that claim that is not deductible after the application of §§ [20.2053-1](/cfr/26/20.2053-1.md) and [20.2053-4(b)](#b); and
    - (vii) The value of each claim deducted under this [paragraph (c)](#c) is subject to adjustment for post-death events.
  - (2) **Effect of post-death events.** If, under this [paragraph (c)](#c), a deduction is claimed for a claim against the estate and, during the period described in [§ 20.2053-1(d)(2)](/cfr/26/20.2053-1.md?p=d-2), the claim is paid or meets the requirements of [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4) for deducting certain ascertainable amounts, the amount of the allowable deduction for that claim is subject to adjustment to reflect, and may not exceed, the amount paid on the claim or the amount meeting the requirements of [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4). If, under this [paragraph (c)](#c), a deduction is claimed for a claim against the estate and, during the period described in [§ 20.2053-1(d)(2)](/cfr/26/20.2053-1.md?p=d-2), the claim remains unpaid (and does not meet the requirements of [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4) for deducting certain ascertainable amounts), the amount of the allowable deduction for that claim is subject to adjustment to reflect, and may not exceed, the current value of the claim. The value of the claim will be considered current if it reflects events occurring after the decedent's death. To claim a deduction for amounts in excess of the amount deductible under this [paragraph (c)](#c), the estate may preserve the estate's right to claim a refund for claims that are not paid or that do not meet the requirements of [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4) until after the expiration of the period of limitation for the filing of a claim for refund by filing a protective claim for refund in accordance with the rules in [§ 20.2053-1(d)(5)](/cfr/26/20.2053-1.md?p=d-5).
  - (3) **Examples.** The following examples illustrate the application of this [paragraph (c)](#c). Assume that the value of each claim is determined from a “qualified appraisal” performed by a “qualified appraiser” and reflects events occurring after the death of the decedent (D). Also assume that each claim represents a personal obligation of D that existed at D's death, that each claim is enforceable against the decedent's estate (and is not unenforceable when paid), and that each claim otherwise satisfies the requirements for deductibility of [§ 20.2053-1](/cfr/26/20.2053-1.md).
- (d) **Special rules—**
  - (1) **Potential and unmatured claims.** Except as provided in [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4) and in paragraphs [(b)](#b) and [(c)](#c) of this section, no estate tax deduction may be taken for a claim against the decedent's estate while it remains a potential or unmatured claim. Claims that later mature may be deducted (to the extent permitted by [§ 20.2053-1](/cfr/26/20.2053-1.md)) in connection with a timely claim for refund. To preserve the estate's right to claim a refund for claims that mature and become deductible after the expiration of the period of limitation for filing a claim for refund, a protective claim for refund may be filed in accordance with [§ 20.2053-1(d)(5)](/cfr/26/20.2053-1.md?p=d-5). See [§ 20.2053-1(b)(3)](/cfr/26/20.2053-1.md?p=b-3) for rules relating to the treatment of court decrees and settlements.
  - (2) **Contested claims.** Except as provided in paragraphs [(b)](#b) and [(c)](#c) of this section, no estate tax deduction may be taken for a claim against the decedent's estate to the extent the estate is contesting the decedent's liability. Contested claims that later mature may be deducted (to the extent permitted by [§ 20.2053-1](/cfr/26/20.2053-1.md)) in connection with a claim for refund filed within the time prescribed in [section 6511(a)](/cfr/26/6511.md?p=a). To preserve the estate's right to claim a refund for claims that mature and become deductible after the expiration of the period of limitation for filing a claim for refund, a protective claim for refund may be filed in accordance with [§ 20.2053-1(d)(5)](/cfr/26/20.2053-1.md?p=d-5). See [§ 20.2053-1(b)(3)](/cfr/26/20.2053-1.md?p=b-3) for rules relating to the treatment of court decrees and settlements.
  - (3) **Claims against multiple parties.** If the decedent or the decedent's estate is one of two or more parties against whom the claim is being asserted, the estate may deduct only the portion of the total claim due from and paid by the estate, reduced by the total of any reimbursement received from another party, insurance, or otherwise. The estate's deductible portion also will be reduced by the contribution or other amount the estate could have collected from another party or an insurer but which the estate declines or fails to attempt to collect. See further [§ 20.2053-1(d)(3)](/cfr/26/20.2053-1.md?p=d-3).
  - (4) **Unenforceable claims.** Claims that are unenforceable prior to or at the decedent's death are not deductible, even if they are actually paid. Claims that become unenforceable during the administration of the estate are not deductible to the extent that they are paid (or will be paid) after they become unenforceable. However, see [§ 20.2053-1(b)(3)(iv)](/cfr/26/20.2053-1.md?p=b-3-iv) regarding a claim whose enforceability is at issue.
  - (5) **Claims founded upon a promise.** Except with regard to pledges or subscriptions (see [§ 20.2053-5](/cfr/26/20.2053-5.md)), [section 2053(c)(1)(A)](/cfr/26/2053.md?p=c-1-A) provides that the deduction for a claim founded upon a promise or agreement is limited to the extent that the promise or agreement was bona fide and in exchange for adequate and full consideration in money or money's worth; that is, the promise or agreement must have been bargained for at arm's length and the price must have been an adequate and full equivalent reducible to a money value.
  - (6) **Recurring payments—**
    - (i) **Noncontingent obligations.** If a decedent is obligated to make recurring payments on an enforceable and certain claim that satisfies the requirements for deductibility under this section and the payments are not subject to a contingency, the amount of the claim will be deemed ascertainable with reasonable certainty for purposes of the rule for deducting certain ascertainable amounts set forth in [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4). If the recurring payments will be paid, a deduction will be allowed under the rule for deducting certain ascertainable amounts set forth in [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4) (subject to any applicable limitations in [§ 20.2053-1](/cfr/26/20.2053-1.md)). Recurring payments for purposes of this section exclude those payments made in connection with a mortgage or indebtedness described in and governed by [§ 20.2053-7](/cfr/26/20.2053-7.md). If a decedent's obligation to make a recurring payment is contingent on the death or remarriage of the claimant and otherwise satisfies the requirements of this [paragraph (d)(6)(i)](#d-6-i), the amount of the claim (measured according to actuarial principles, using factors set forth in the transfer tax regulations or otherwise provided by the IRS) will be deemed ascertainable with reasonable certainty for purposes of the rule for deducting certain ascertainable amounts set forth in [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4).
    - (ii) **Contingent obligations.** If a decedent has a recurring obligation to pay an enforceable and certain claim but the decedent's obligation is subject to a contingency or is not otherwise described in [paragraph (d)(6)(i)](#d-6-i) of this section, the amount of the claim is not ascertainable with reasonable certainty for purposes of the rule for deducting certain ascertainable amounts set forth in [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4). Accordingly, the amount deductible is limited to amounts actually paid by the estate in satisfaction of the claim in accordance with [§ 20.2053-1(d)(1)](/cfr/26/20.2053-1.md?p=d-1) (subject to any applicable limitations in [§ 20.2053-1](/cfr/26/20.2053-1.md)).
    - (iii) **Purchase of commercial annuity to satisfy recurring obligation to pay.** If a decedent has a recurring obligation (whether or not contingent) to pay an enforceable and certain claim and the estate purchases a commercial annuity from an unrelated dealer in commercial annuities in an arm's-length transaction to satisfy the obligation, the amount deductible by the estate (subject to any applicable limitations in [§ 20.2053-1](/cfr/26/20.2053-1.md)) is the sum of—
      - (A) The amount paid for the commercial annuity, to the extent that the amount paid is not refunded, or expected to be refunded, to the estate;
      - (B) Any amount actually paid to the claimant by the estate prior to the purchase of the commercial annuity; and
      - (C) Any amount actually paid to the claimant by the estate in excess of the annuity amount as is necessary to satisfy the recurring obligation.
  - (7) **Examples.** The following examples illustrate the application of [paragraph (d)](#d) of this section. Except as is otherwise provided in the examples, assume—
    - (i) A claim satisfies the applicable requirements set forth in [§ 20.2053-1](/cfr/26/20.2053-1.md) and [paragraph (a)](#a) of this section, is payable from property subject to claims, and the amount of the claim is not subject to any other applicable limitations in [§ 20.2053-1](/cfr/26/20.2053-1.md);
    - (ii) A claim is not deductible under paragraphs [(b)](#b) or [(c)](#c) of this section as an exception to the general rule contained in [paragraph (a)](#a) of this section; and
    - (iii) The claimant (C) is not a family member, related entity or beneficiary of the estate of decedent (D) and is not the executor (E).
- (e) **Interest on claim—**
  - (1) Subject to any applicable limitations in [§ 20.2053-1](/cfr/26/20.2053-1.md), the interest on a deductible claim is itself deductible as a claim under [section 2053](/cfr/26/2053.md) to the extent of the amount of interest accrued at the decedent's death (even if the executor elects the alternate valuation method under [section 2032](/cfr/26/2032.md)), but only to the extent of the amount of interest actually paid or meeting the requirements of [§ 20.2053-1(d)(4)](/cfr/26/20.2053-1.md?p=d-4) for deducting certain ascertainable amounts.
  - (2) Post-death accrued interest may be deductible in appropriate circumstances either as an estate tax administration expense under [section 2053](/cfr/26/2053.md) or as an income tax deduction.
- (f) **Effective/applicability date.** This section applies to the estates of decedents dying on or after October 20, 2009.

# §20.2053-5. Deductions for charitable, etc., pledges or subscriptions.

- (a) A pledge or a subscription, evidenced by a promissory note or otherwise, even though enforceable against the estate, is deductible (subject to any applicable limitations in [§ 20.2053-1](/cfr/26/20.2053-1.md)) only to the extent that—
  - (1) Liability therefor was contracted bona fide and for an adequate and full consideration in cash or its equivalent, or
  - (2) It would have constituted an allowable deduction under [section 2055](/cfr/26/2055.md) (relating to charitable, etc., deductions) if it had been a bequest.
- (b) **Effective/applicability date.** This section applies to the estates of decedents dying on or after October 20, 2009.

# §20.2053-6. Deduction for taxes.

- (a) **In general.**
  - (1) **Taxes are deductible in computing a decedent's gross estate—**
    - (i) Only as claims against the estate (except to the extent that excise taxes may be allowable as administration expenses);
    - (ii) Only to the extent not disallowed by [section 2053(c)(1)(B)](/cfr/26/2053.md?p=c-1-B) and this section; and
    - (iii) Subject to any applicable limitations in [§ 20.2053-1](/cfr/26/20.2053-1.md).
  - (2) See §§ [20.2053-9](/cfr/26/20.2053-9.md) and [20.2053-10](/cfr/26/20.2053-10.md) with respect to the deduction allowed for certain state and foreign death taxes.
- (b) **Property taxes.** Property taxes are not deductible unless they accrued before the decedent's death. However, they are not deductible merely because they have accrued in an accounting sense. Property taxes in order to be deductible must be an enforceable obligation of the decedent at the time of his death.
- (c) **Death taxes.**
  - (1) For the estates of decedents dying on or before December 31, 2004, no estate, succession, legacy or inheritance tax payable by reason of the decedent's death is deductible, except as provided in §§ [20.2053-9](/cfr/26/20.2053-9.md) and [20.2053-10](/cfr/26/20.2053-10.md) with respect to certain state and foreign death taxes on transfers for charitable, etc., uses. However, see sections [2011](/cfr/26/2011.md) and [2014](/cfr/26/2014.md) and the corresponding regulations with respect to credits for death taxes.
  - (2) For the estates of decedents dying after December 31, 2004, see [section 2058](/cfr/26/2058.md) to determine the deductibility of state death taxes.
- (d) **Gift taxes.** Unpaid gift taxes on gifts made by a decedent before his death are deductible. If a gift is considered as made one-half by the decedent and one-half by his spouse under [section 2513](/cfr/26/2513.md), the entire amount of the gift tax, unpaid at the decedent's death, attributable to a gift in fact made by the decedent is deductible. No portion of the tax attributable to a gift in fact made by the decedent's spouse is deductible except to the extent that the obligation is enforced against the decedent's estate and his estate has no effective right of contribution against his spouse. (See [section 2012](/cfr/26/2012.md) and [§ 20.2012-1](/cfr/26/20.2012-1.md) with respect to credit for gift taxes paid upon gifts of property included in a decedent's gross estate.)
- (e) **Excise taxes.** Excise taxes incurred in selling property of a decedent's estate are deductible as an expense of administration if the sale is necessary in order to (1) pay the decedent's debts, expenses of administration, or taxes, (2) preserve the estate, or (3) effect distribution. Excise taxes incurred in distributing property of the estate in kind are also deductible.
- (f) **Income taxes.** Unpaid income taxes are deductible if they are on income property includible in an income tax return of the decedent for a period before his death. Taxes on income received after the decedent's death are not deductible. If income received by a decedent during his lifetime is included in a joint income tax return filed by the decedent and his spouse, or by the decedent's estate and his surviving spouse, the portion of the joint liability for the period covered by the return for which a deduction will be allowed is the amount for which the decedent's estate would be liable under local law, as between the decedent and his spouse, after enforcement of any effective right of reimbursement or contribution. In the absence of evidence to the contrary, the deductible amount is presumed to be an amount bearing the same ratio to the total joint tax liability for the period covered by the return that the amount of income tax for which the decedent would have been liable if he had filed a separate return for that period bears to the total of the amounts for which the decedent and his spouse would have been liable if they had both filed separate returns for that period. Thus, in the absence of evidence to the contrary, the deductible amount equals: Decedent's separate tax ÷ Both separate taxes × Joint tax. However, the deduction cannot in any event exceed the lesser of—
  - (1) The decedent's liability for the period (as determined in this paragraph) reduced by the amounts already contributed by the decedent toward payment of the joint liability, or
  - (2) If there is an enforceable agreement between the decedent and his spouse or between the executor and the spouse relative to the payment of the joint liability, the amount which pursuant to the agreement is to be contributed by the estate toward payment of the joint liability.
- (g) **Post-death adjustments of deductible tax liability.** Post-death adjustments increasing a tax liability accrued prior to the decedent's death, including increases of taxes deducted under this section, will increase the amount of the deduction available under [section 2053(a)(3)](/cfr/26/2053.md?p=a-3) for that tax liability. Similarly, any refund subsequently determined to be due to and received by the estate or its successor in interest with respect to taxes deducted by the estate under this section reduce the amount of the deduction taken for that tax liability under [section 2053(a)(3)](/cfr/26/2053.md?p=a-3). Expenses associated with defending the estate against the increase in tax liability or with obtaining the refund may be deductible under [§ 20.2053-3(d)(3)](/cfr/26/20.2053-3.md?p=d-3). A protective claim for refund of estate taxes may be filed before the expiration of the period of limitation for filing a claim for refund in order to preserve the estate's right to claim a refund if the amount of a deductible tax liability may be affected by such an adjustment or refund. The application of this section may be illustrated by the following examples:
- (h) **Effective/applicability date.** This section applies to the estates of decedents dying on or after October 20, 2009.

# §20.2053-7. Deduction for unpaid mortgages.


A deduction is allowed from a decedent's gross estate of the full unpaid amount of a mortgage upon, or of any other indebtedness in respect of, any property of the gross estate, including interest which had accrued thereon to the date of death, provided the value of the property, undiminished by the amount of the mortgage or indebtedness, is included in the value of the gross estate. If the decedent's estate is liable for the amount of the mortgage or indebtedness, the full value of the property subject to the mortgage or indebtedness must be included as part of the value of the gross estate; the amount of the mortgage or indebtedness being in such case allowed as a deduction. But if the decedent's estate is not so liable, only the value of the equity of redemption (or the value of the property, less the mortgage or indebtedness) need be returned as part of the value of the gross estate. In no case may the deduction on account of the mortgage or indebtedness exceed the liability therefor contracted bona fide and for an adequate and full consideration in money or money's worth. See [§ 20.2043-1](/cfr/26/20.2043-1.md). Only interest accrued to the date of the decedent's death is allowable even though the alternate valuation method under [section 2032](/cfr/26/2032.md) is selected. In any case where real property situated outside the United States no deduction may be taken of any mortgage thereon or any other indebtedness does not form a part of the gross estate, in respect thereof.


# §20.2053-8. Deduction for expenses in administering property not subject to claims.

- (a) Expenses incurred in administering property included in a decedent's gross estate but not subject to claims fall within the second category of deductions set forth in [§ 20.2053-1](/cfr/26/20.2053-1.md), and may be allowed as deductions if they—
  - (1) Would be allowed as deductions in the first category if the property being administered were subject to claims; and
  - (2) **Were paid before the expiration of the period of limitation for assessment provided in section 6501.**
- (b) These expenses may be allowed as deductions only to the extent that they would be allowed as deductions under the first category if the property were subject to claims. See [§ 20.2053-3](/cfr/26/20.2053-3.md). The only expenses in administering property not subject to claims which are allowed as deductions are those occasioned by the decedent's death and incurred in settling the decedent's interest in the property or vesting good title to the property in the beneficiaries. Expenses not coming within the description in the preceding sentence but incurred on behalf of the transferees are not deductible.
- (c) The principles set forth in paragraphs [(b)](/cfr/26/20.2053-3.md?p=b), [(c)](/cfr/26/20.2053-3.md?p=c), and [(d)](/cfr/26/20.2053-3.md?p=d) of § 20.2053-3 (relating to the allowance of executor's commissions, attorney's fees, and miscellaneous administration expenses of the first category) are applied in determining the extent to which trustee's commissions, attorney's and accountant's fees, and miscellaneous administration expenses are allowed in connection with the administration of property not subject to claims.
- (d) The application of this section may be illustrated by the following examples:

# §20.2053-9. Deduction for certain State death taxes.

- (a) **General rule.** A deduction is allowed a decedent's estate under [section 2053(d)](/cfr/26/2053.md?p=d) for the amount of any estate, succession, legacy, or inheritance tax imposed by a State, Territory, or the District of Columbia, or, in the case of a decedent dying before September 3, 1958, a possession of the United States upon a transfer by the decedent for charitable, etc., uses described in section [2055](/cfr/26/2055.md) or [2106(a)(2)](/cfr/26/2106.md?p=a-2) (relating to the estates of nonresidents not citizens), but only if (1) the conditions stated in [paragraph (b)](#b) of this section are met, and (2) an election is made in accordance with the provisions of [paragraph (c)](#c) of this section. See [section 2011(e)](/cfr/26/2011.md?p=e) and [§ 20.2011-2](/cfr/26/20.2011-2.md) for the effect which the allowance of this deduction has upon the credit for State death taxes. However, see [section 2058](/cfr/26/2058.md) to determine the deductibility of state death taxes by estates to which [section 2058](/cfr/26/2058.md) is applicable.
- (b) **Condition for allowance of deduction.**
  - (1) **The deduction is not allowed unless either—**
    - (i) The entire decrease in the Federal estate tax resulting from the allowance of the deduction inures solely to the benefit of a charitable, etc., transferee described in section [2055](/cfr/26/2055.md) or [2106(a)(2)](/cfr/26/2106.md?p=a-2), or
    - (ii) The Federal estate tax is equitably apportioned among all the transferees (including the decedent's surviving spouse and the charitable, etc., transferees) of property included in the decedent's gross estate.
  - (2) For purposes of this paragraph, the Federal estate tax is considered to be equitably apportioned among all the transferees (including the decedent's surviving spouse and the charitable, etc., transferees) of property included in the decedent's gross estate only if each transferee's share of the tax is based upon the net amount of his transfer subjected to the tax (taking into account any exemptions, credits, or deductions allowed by Chapter 11). See examples (2) through (5) of [paragraph (e)](#e) of this section.
- (c) **Exercise of election.** The election to take a deduction for a state death tax imposed upon a transfer for charitable, etc., uses shall be exercised by the executor by the filing of a written notification to that effect with the Commissioner. The notification shall be filed before the expiration of the period of limitation for assessment provided in [section 6501](/cfr/26/6501.md) (usually 3 years from the last day for filing the return). The election may be revoked by the executor by the filing of a written notification to that effect with the Commissioner at any time before the expiration of such period.
- (d) **Amount of State death tax imposed upon a transfer.** If a State death tax is imposed upon the transfer of the decedent's entire estate and not upon the transfer of a particular share thereof, the State death tax imposed upon a transfer for charitable, etc., uses is deemed to be an amount, E, which bears the same ratio to F (the amount of the State death tax imposed with respect to the transfer of the entire estate) as G (the value of the charitable, etc., transfer, reduced as provided in the next sentence) bears to H (the total value of the properties, interests, and benefits subjected to the State death tax received by all persons interested in the estate, reduced as provided in the last sentence of this paragraph). In arriving at amount G of the ratio, the value of the charitable, etc., transfer is reduced by the amount of any deduction or exclusion allowed with respect to such property in determining the amount of the State death tax. In arriving at amount H of the ratio, the total value of the properties, interests, and benefits subjected to State death tax received by all persons interested in the estate is reduced by the amount of all deductions and exclusions allowed in determining the amount of the State death tax on account of the nature of a beneficiary or a beneficiary's relationship to the decedent.
- (e) **Examples.** The application of this section may be illustrated by the following examples:
- (f) **Effective/applicability date.**
  - (1) The last sentence of [paragraph (a)](#a) of this section applies to the estates of decedents dying on or after October 20, 2009, to which [section 2058](/cfr/26/2058.md) is applicable.
  - (2) The other provisions of this section apply to the estates of decedents dying on or after October 20, 2009, to which [section 2058](/cfr/26/2058.md) is not applicable.

# §20.2053-10. Deduction for certain foreign death taxes.

- (a) **General rule.** A deduction is allowed the estate of a decedent dying on or after July 1, 1955, under [section 2053(d)](/cfr/26/2053.md?p=d) for the amount of any estate, succession, legacy, or inheritance tax imposed by and actually paid to any foreign country, in respect of any property situated within such foreign country and included in the gross estate of a citizen or resident of the United States, upon a transfer by the decedent for charitable, etc., uses described in [section 2055](/cfr/26/2055.md), but only if (1) the conditions stated in [paragraph (b)](#b) of this section are met, and (2) an election is made in accordance with the provisions of [paragraph (c)](#c) of this section. The determination of the country within which property is situated is made in accordance with the rules contained in sections [2104](/cfr/26/2104.md) and [2105](/cfr/26/2105.md) in determining whether property is situated within or without the United States. See [section 2014(f)](/cfr/26/2014.md?p=f) and [§ 20.2014-7](/cfr/26/20.2014-7.md) for the effect which the allowance of this deduction has upon the credit for foreign death taxes.
- (b) **Condition for allowance of deduction.**
  - (1) **The deduction is not allowed unless either—**
    - (i) The entire decrease in the Federal estate tax resulting from the allowance of the deduction inures solely to the benefit of a charitable, etc., transferee described in [section 2055](/cfr/26/2055.md), or
    - (ii) The Federal estate tax is equitably apportioned among all the transferees (including the decedent's surviving spouse and the charitable, etc., transferees) of property included in the decedent's gross estate.
  - (2) For purposes of this paragraph, the Federal estate tax is considered to be equitably apportioned among all the transferees (including the decedent's surviving spouse and the charitable, etc., transferees) of property included in the decedent's gross estate only if each transferee's share of the tax is based upon the net amount of his transfer subjected to the tax (taking into account any exemptions, credits, or deductions allowed by Chapter 11). See examples (2) through (5) of [paragraph (e)](/cfr/26/20.2053-9.md?p=e) of § 20.2053-9.
- (c) **Exercise of election.** The election to take a deduction for a foreign death tax imposed upon a transfer for charitable, etc., uses shall be exercised by the executor by the filing of a written notification to that effect with the Commissioner of internal revenue in whose district the estate tax return for the decedent's estate was filed. An election to take the deduction for foreign death taxes is deemed to be a waiver of the right to claim a credit under a treaty with any foreign country for any tax or portion thereof claimed as a deduction under this section. The notification shall be filed before the expiration of the period of limitation for assessment provided in [section 6501](/cfr/26/6501.md) (usually 3 years from the last day for filing the return). The election may be revoked by the executor by the filing of a written notification to that effect with the Commissioner at any time before the expiration of such period.
- (d) **Amount of foreign death tax imposed upon a transfer.** If a foreign death tax is imposed upon the transfer of the entire part of the decedent's estate subject to such tax and not upon the transfer of a particular share thereof, the foreign death tax imposed upon a transfer for charitable, etc., uses is deemed to be an amount, J, which bears the same ratio to K (the amount of the foreign death tax imposed with respect to the transfer of the entire part of the decedent's estate subject to such tax) as M (the value of the charitable, etc., transfer, reduced as provided in the next sentence) bears to N (the total value of the properties, interests, and benefits subjected to the foreign death tax received by all persons interested in the estate, reduced as provided in the last sentence of this paragraph). In arriving at amount M of the ratio, the value of the charitable, etc., transfer is reduced by the amount of any deduction or exclusion allowed with respect to such property in determining the amount of the foreign death tax. In arriving at amount N of the ratio, the total value of the properties, interests, and benefits subjected to foreign death tax received by all persons interested in the estate is reduced by the amount of all deductions and exclusions allowed in determining the amount of the foreign death tax on account of the nature of a beneficiary or a beneficiary's relationship to the decedent.