Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return Page 24
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41Form 706 (Rev. 8-93)
Instructions for Schedule J.—
estate, you may deduct this amount to the extent it is
not more than the compensation allowable by the local
Funeral Expenses and Expenses Incurred
law or practice.
in Administering Property Subject to
Do not deduct on this schedule amounts paid as
Claims
trustees’ commissions whether received by you acting
General.—You must complete and file Schedule J if
in the capacity of a trustee or by a separate trustee. If
you claim a deduction on item 11 of Part 5,
such amounts were paid in administering property not
Recapitulation.
subject to claims, deduct them on Schedule L.
On Schedule J, itemize funeral expenses and
Note: Executors’ commissions are taxable income to
expenses incurred in administering property subject to
the executors. Therefore, be sure to include them as
claims. List the names and addresses of persons to
income on your individual income tax return.
whom the expenses are payable and describe the
Attorney Fees.—Enter the amount of attorney fees
nature of the expense. Do not list expenses incurred
that have actually been paid or that you reasonably
in administering property not subject to claims on
expect to be paid. If on the final examination of the
this schedule. List them on Schedule L instead.
return the fees claimed have not been awarded by the
Funeral Expenses.—Itemize funeral expenses on line
proper court and paid, the deduction will be allowed
A. Deduct from the expenses any amounts that were
provided the District Director is reasonably satisfied
reimbursed, such as death benefits payable by the
that the amount claimed will be paid and that it does
Social Security Administration and the Veterans
not exceed a reasonable payment for the services
Administration.
performed, taking into account the size and character
of the estate and the local law and practice. If the fees
Executors’ Commissions.—When you file the return,
claimed have not been paid at the time of final
you may deduct commissions that have actually been
examination of the return, the amount deducted must
paid to you or that you expect will be paid. You may
be supported by an affidavit, or statement signed
not deduct commissions if none will be collected. If the
under the penalties of perjury, by the executor or the
amount of the commissions has not been fixed by
attorney stating that the amount has been agreed
decree of the proper court, the deduction will be
upon and will be paid.
allowed on the final examination of the return, provided
that:
Do not deduct attorney fees incidental to litigation
incurred by the beneficiaries. These expenses are
The District Director is reasonably satisfied that the
charged against the beneficiaries personally and are
commissions claimed will be paid;
not administration expenses authorized by the Code.
The amount entered as a deduction is within the
Miscellaneous Expenses.—Miscellaneous
amount allowable by the laws of the jurisdiction
administration expenses necessarily incurred in
where the estate is being administered;
preserving and distributing the estate are deductible.
It is in accordance with the usually accepted
These expenses include appraiser’s and accountant’s
practice in that jurisdiction for estates of similar size
fees, certain court costs, and costs of storing or
and character.
maintaining assets of the estate.
If you have not been paid the commissions claimed
The expenses of selling assets are deductible only if
at the time of the final examination of the return, you
the sale is necessary to pay the decedent’s debts, the
must support the amount you deducted with an
expenses of administration, or taxes, or to preserve the
affidavit or statement signed under the penalties of
estate or carry out distribution.
perjury that the amount has been agreed upon and will
be paid.
You may not deduct a bequest or devise made to
you instead of commissions. If, however, the decedent
fixed by will the compensation payable to you for
services to be rendered in the administration of the
Schedule J—Page 24
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