Estate or Income Tax Deductions

The CPA Journal, March 1992 | Go to article overview
Save to active project

Estate or Income Tax Deductions


In computing the taxable estate of an individual on Form 706 or computing the taxable income of an estate on Form 1041, expenses of administration under IRC Sec. 2053(a)(2) or expenses of loss during the administration of the estate under Sec. 2054 may be deducted on either return but not on both.

While each situation is different, presumably these deductions would be taken on the return where their use would yield the greater tax benefit. For instance, where an estate has no transfer tax liability due to a marital deduction, these deductions would probably be more beneficial on the estate's income tax return rather than on the estate tax return.

If the decision is made to claim these deductions on the income tax return, under Reg. Sec. 1.642(g)-1, the fiduciary must file a formal election in duplicate stating that the amounts involved are not being allowed as estate tax deductions and that all rights to have such items allowed are waived. It should be pointed out that if these deductions are to be included on the estate tax return the fiduciary need give no assurance on that return that he or she has not or will not also claim the same deduction as an income tax deduction.

UNIFORMITY IS NOT REQUIRED

The law under Reg. Sec. 1.642(g)-2 does not require that all deductions be treated the same or that the total of any one type of deduction be treated the same. Thus, certain deductions may be treated as estate tax deductions and other deductions may be treated as income tax deductions. In addition, a portion of one type of deduction may be claimed as an estate tax deduction and another part of the same deduction may be claimed as an income tax deduction.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Estate or Income Tax Deductions
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?