[Federal Register Volume 77, Number 62 (Friday, March 30, 2012)]
[Rules and Regulations]
[Page 19080]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7819]



[[Page 19080]]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 20


Estate Tax; Estates of Decedents Dying After August 16, 1954

CFR Correction

0
In Title 26 of the Code of Federal Regulations, Parts 2 to 29, revised 
as of April 1, 2011, on page 392, in Sec.  20.2053-4, at the end of 
paragraph (c)(3), Examples 1-3 are added to read as follows:


Sec.  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 Sec.  
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 Sec.  
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 Sec.  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 Sec.  
20.2053-4(b). E may claim a deduction under this paragraph (c) for 
the total value of A's claim not deducted under Sec.  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 Sec.  
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]
BILLING CODE 1505-01-D