Estate Tax Deductions— Sections 2053, 2054 and 2058 (Portfolio 840)


Edward J. Beckwith


Baker & Hostetler LLP


Turney Berry


Wyatt, Tarrant & Combs LLP

At a glance

I. Introduction
II. Deductions Under Section 2053
III. Deductions Under Section 2054 - Losses


Tax Management Portfolio, Estate Tax Deductions — Sections 2053, 2054 and 2058, No. 840, discusses three of the five categories of deductions permitted from a decedent's gross estate in arriving at his or her taxable estate. The other two categories are the §2056 marital deduction and the §2055 charitable deduction.

Section 2053 encompasses deductions for funeral expenses, administration expenses, claims against the estate, charitable pledges or subscriptions, taxes, and unpaid mortgages. Expenses of the estate and claims against it are deductible only if they are allowable under state law. In addition, some expenses incurred in administering property that is not part of the probate estate are deductible, provided they would have been deductible if incurred in connection with the administration of probate assets and are paid within a specific time period. Claims against the estate must have existed at the time of death, must be enforceable against the estate, and, generally, must be based upon a promise or agreement supported by consideration or be imposed by law.

Section 2054 covers certain casualty losses incurred during the administration of an estate. These losses must be of the same nature as allowable for casualty losses under the income tax provisions of the Internal Revenue Code.

Section 2058 is the deduction for state death taxes that replaced the former §2011 credit for state death taxes.

This Portfolio may be cited as Beckwith and Berry, 840 T.M., Estate Tax Deductions — Sections 2053, 2054 and 2058.

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