2.3 Adjusted Gross Estate

• Library: A Lawyer's Guide to Estate Planning: Fundamentals for the Legal Practitioner (ABA) (2018 Ed.)

2.3 Adjusted Gross Estate

The adjusted gross estate is determined by subtracting several types of estate-related expenses from the gross estate. The only importance of the adjusted gross estate is to calculate the percentage requirements to determine if the estate qualifies for a Section 303 redemption or a Section 6166 extension to pay the estate tax. The adjusted gross estate had greater significance in earlier years when the marital deduction was limited to 50% of the adjusted gross estate. Now that the marital deduction is an unlimited deduction, the adjusted gross estate has significance only for computing entitlement to these two elections.

The permissible deductions include the actual expenses incurred for funeral expenses, costs of administration, debts and unpaid mortgages of the decedent, and losses incurred during estate...