Vanderbilt Law Review


Mark D. Maloney

First Page



This Recent Development will examine the relationship between two Code provisions that are essential to the calculation of the taxable estate. Section 2031 establishes the value of the "gross estate," and section 2053 provides that certain administrative expenses are deductible from the gross estate. Recently, in Estate of Joslyn v. Commissioner and Estate of Jenner v. Commissioner,' two United States Courts of Appeals applied sections 2031 and 2053 in a manner that substantially benefits estates that possess large holdings of a particular stock. Because large blocks of stock are difficult to liquidate, the per-share price of the stock will actually be lower than the stock exchange price.' Under section 2031, the executor may account for this factor in calculating the fair market value of the stock. Accordingly, in both recent cases, the executors reduced the value of the section 2031 gross estate by the amount of underwriters' commissions necessary to liquidate the stock. The executors then deducted the same commissions from the gross estate as administrative expenses under section 2053. In both cases, the courts allowed the deductions. The estates thus benefited from a double deduction. This Recent Development will examine the interrelationship between sections 2031 and 2053 and proposes that Congress eliminate this "double deduction" by amending section 2053.