Trusts and Estates
Ca. Trs. & Estates Quarterly Volume 12, Issue 2, Summer 2006
Content
- A Charitable Catch-22: Standing For Private Attorney General Actions In California
- Risky Business: Family Business Succession and the Rules of Professional Conduct
- Speak Now or Forever Hold Your Peace: a Legislative Proposal For Collateral Estoppel of Substituted Judgment Orders
- The Fiduciary's Conflict: One Lawyer or Two?
- Crossed Circuits On Estate Tax Deductibility of Disputed or Contingent Claims
CROSSED CIRCUITS ON ESTATE TAX DEDUCTIBILITY OF DISPUTED OR CONTINGENT CLAIMS
By Jeffrey M. Loeb*
I. INTRODUCTION
Although federal tax laws are supposed to be applied uniformly throughout the nation, there is at least one law which is applied differently depending on where an estate is administered following death. Internal Revenue Code § 2053(a)(3)1 allows a deduction for "claims against the estate" which are "allowable by the laws of the jurisdiction . . . under which the estate is being administered." But even if the laws regarding estate claims were exactly the same in every jurisdiction, the deductibility of claims that are disputed or subject to contingencies at death depends on the federal circuit in which the decedent’s estate is administered.2 This article explains how this unusual situation developed inside the federal judicial system and offers an opinion as to how the U.S. Supreme Court should resolve the conflicting judicial views.