Rules and Regulations. DEPARTMENT OF THE TREASURY
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/register/2012/03/30/2012-7819·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
BILLING CODE 4191-02-P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 20 Estate Tax; Estates of Decedents Dying After August 16, 1954 CFR Correction In Title 26 of the Code of Federal Regulations, Parts 2 to 29, revised as of April 1, 2011, on page 392, in § 20.2053-4, at the end of paragraph (c)(3), Examples 1-3 are added to read as follows: § 20.2053-4 Deduction for claims against the estate.
(c)* * *
(3)* * * Example 1. There are three claims against the estate of the decedent
(D)that are not paid and are not deductible under § 20.2053-1(d)(4) or paragraph
(b)of this section: $25,000 of Claimant A, $35,000 of Claimant B, and $1,000,000 of Claimant C. The executor of D's estate
(E)may not claim a deduction under this paragraph with respect to any portion of the claim of Claimant C because the value of that claim exceeds $500,000. E may claim a deduction under this paragraph for the total amount of the claims filed by Claimant A and Claimant B ($60,000) because the aggregate value of the full amount of those claims does not exceed $500,000. Example 2. There are three claims against the estate of the decedent
(D)that are not paid and are not deductible under § 20.2053-1(d)(4) or paragraph
(b)of this section; specifically, a separate $200,000 claim of each of three claimants, A, B and C. The executor of D's estate
(E)may claim a deduction under this paragraph for any two of these three claims because the aggregate value of the full amount of any two of the claims does not exceed $500,000. E may not deduct any part of the value of the remaining claim under this paragraph because the aggregate value of the full amount of all three claims would exceed $500,000. Example 3. As a result of an automobile accident involving the decedent
(D)and A, D's gross estate includes a claim against A that is valued at $750,000. In the same matter, A files a counterclaim against D's estate that is valued at $1,000,000. A's claim against D's estate is not paid and is not deductible under § 20.2053-1(d)(4). All other section 2053 claims and expenses of D's estate have been paid and are deductible. The executor of D's estate
(E)deducts $750,000 of A's claim against the estate under § 20.2053-4(b). E may claim a deduction under this paragraph
(c)for the total value of A's claim not deducted under § 20.2053-4(b), or $250,000. If, instead, the value of A's claim against D's estate is $1,500,000, so that the amount not deductible under § 20.2053-4(b) exceeds $500,000, no deduction is available under this paragraph (c). [FR Doc. 2012-7819 Filed 3-29-12; 8:45 am]
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