Article on Estate Tax Deductions

DanielBaltuch recently published an article entitled, Estate Tax Deductions forInterest Paid on Loans Taken in Order to Pay Estate Taxes, 37 ACTEC L.J. 407(Winter 2011).  Provided below is the introduction to his article:

Thispaper will discuss the various issues involved with the estate taxdeductibility of interest expenses for loans taken in order to pay estatetaxes. The basis for such deductions, taken against the gross estate, is foundin §2053 of the Internal Revenue Code, which allows deductions, inter alia, foradministration expenses, 1) “as are allowable by the laws of the jurisdiction.”1 The regulations provide the other twoprincipal requirements an administration expense must meet in order to bedeductible: 2) the expense must be “necessary,” and 3) it must be “actuallyincurred.”2 What is actuallyrequired to satisfy these three elements has been developed in the Federal caselaw, the regulations, and other I.R.S. materials. Section I of this paperprovides an introduction to the subject. Section II will discuss the necessityrequirement. Section III will discuss the actually incurred requirement.Section IV will discuss the state law allowability requirement.