The IRS and Treasury have proposed regulations incorporating present-value principles by which an estate may deduct certain expenses and claims against the estate under Sec. 2053.
The new proposed regulations apply present-value principles to both contingent and noncontingent expenses and claims. Noting that most ordinary administrative expenses are paid within three years of the decedent's date of death, the proposed regulations would allow a three-year "grace period" from that date before the IRS requires a present-value calculation.
The proposed regulations also address the deductibility of certain interest expenses as an expense of administering an estate, including (non–Sec. 6166) interest accruing on unpaid tax and penalties.
The proposed regulations would apply to the estates of decedents dying on or after the date of their publication as final. Read more.