The Stratford Estate incurs a $25,000 legal fee in disposing of the decedent's real property. The executor can decide to claim a $5,000 deduction against the Federal estate tax and a $20,000 deduction on the estate's income tax return.

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The executor of an estate has the discretion to allocate certain expenses between the estate tax return and the income tax return of the estate, as long as the total deduction does not exceed the actual amount spent. This strategy can be used to minimize the overall tax liability of the estate.

The Stratford Estate Incurs a $25,000 Legal Fee in Disposing