Steve Akers' Summary of Final Section 2053 Regulations

Steve Akers, Associate Fiduciary Counsel, Bessemer Trust, provides the following summary of the final Section 2053 Regulations:

Final regulations (effective for decedents dying after October 19, 2009) continue the general concept in proposed regulations of allowing an estate tax deduction under section 2053 for nonascertainable or contingent claims only when they are actually paid. Some of the major changes include:

• Several exceptions are allowed (but will probably not be widely used).
• Rules for recognizing settlements are relaxed.
• There is no affirmative duty for an executor to report when claimed expenses or claims are not actually paid.
• The impact on marital and charitable deductions is clarified.
• Further guidance has been (and will be) provided on using protective claims for refund so that nonascertainable claims can be deducted when they are paid.
• Under Notice 2009-84, the IRS will not consider issues other than the claim itself under a protective claim for refund under section 2053 if the three-year period for additional assessments has run when the contingency is resolved.

Please click here for a more detailed summary of the final regulations.

Posted by Lewis J. Saret, General Editor, Wealth Strategies Journal.