                         T.C. Memo. 1999-396



                       UNITED STATES TAX COURT



          ESTATE OF CONSTANCE R. GRANT, DECEASED, P. WALKER
          GRANT, JR., PERSONAL REPRESENTATIVE, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3818-98.               Filed December 7, 1999.



     P. Walker Grant, Jr. (personal representative), for peti-

tioner.

     Elise F. Alair and Bradford A. Johnson, for respondent.



               MEMORANDUM FINDINGS OF FACT AND OPINION


     CHIECHI, Judge:    Respondent determined a deficiency of

$15,248 in Federal estate tax (estate tax) with respect to the

estate of Constance R. Grant (the estate).     The issue remaining

for decision is whether the estate is entitled to deduct certain
                              - 2 -


amounts claimed under section 2053.1   We hold that it is to the

extent stated herein.

                        FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

     At the time the petition was filed, P. Walker Grant, Jr.

(Mr. Grant), the son of decedent and a personal representative of

the estate, resided in Shelburne, Vermont.2

     On October 1, 1991, Ms. Grant, who was residing and domi-

ciled in Montgomery County, Maryland, executed a declaration of

trust (declaration of trust) under which she placed most of her

real and personal property into a revocable trust known as the

“CONSTANCE R. GRANT REVOCABLE TRUST” (Trust).   The declaration of

trust provided in pertinent part:

          2. Trust Estate. I hereby transfer, assign,
     convey and quit claim unto myself, as Trustee, and unto
     my successors in trust all of the property enumerated
     in Schedule A hereto attached, to have and to hold such
     property, and any other property which may be added to
     the Trust Estate pursuant to the provisions hereof, all
     of which property is hereinafter collectively referred
     to as the “Trust Estate”.



     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect on the date of the death of
Constance R. Grant (decedent or Ms. Grant). All Rule references
are to the Tax Court Rules of Practice and Procedure.
     2
      Kathryn Lynn Grant Adams (Ms. Adams), the only other child
of decedent, also served as a personal representative of the
estate. The record does not disclose where Ms. Adams resided at
the time the petition was filed in this case.
                         - 3 -


     3. Trust and Successor Trustee. So long as I am
alive and competent, I shall serve as Trustee of the
Trust Estate. In the event of the death or resignation
of the Donor [decedent] as Trustee, or if the Donor’s
personal physician certifies in writing to the Donor’s
children, PRESTON WALKER GRANT, JR. and KATHRYN LYNN
GRANT ADAMS, that, in his judgment, the Donor is physi-
cally or mentally unable to administer the Trust Es-
tate, then PRESTON WALKER GRANT, JR., KATHRYN LYNN
GRANT ADAMS and DONALD R. WILSON, shall serve as Suc-
cessor Trustees. If the Donor’s physician subsequently
certifies in writing to the Successor Trustees that the
donor has recovered and is currently mentally and
physically able to serve as Trustee, the appointment of
the Substitute Trustee shall terminate and the Donor
shall be restored as Trustee.

  *       *       *       *       *       *       *

     4. Revocation. I hereby reserve the right at any
time, and from time to time, during my lifetime, to
revoke the Trust Estate, in whole or in part, or to
change, alter, modify or amend any of the terms and
provisions hereof, and to withdraw all funds and other
property, in whole or in part, without the consent of
any other person.

   *       *       *       *       *       *       *

     7. Distribution of Income and Principal During My
Lifetime. During my lifetime, I shall have the power
to withdraw any part or all of the net income and
principal of the Trust. Any net income not withdrawn
shall be added to the principal.

   *       *       *       *       *       *       *

     8. Distribution on Death. Upon my death, the
“Net Assets” (as hereinafter defined) of the Trust
Estate shall be distributed by my Successor Trustee to
my children PRESTON WALKER GRANT, JR. and KATHRYN LYNN
ADAMS, in equal shares per stirpes, whereupon this
trust shall terminate.

          (a) My Successor Trustees, in their sole
discretion, are authorized to distribute the Net Assets
of the Trust Estate to my children in kind or in cash,
                         - 4 -


or partly in each. If they elect to distribute wholly
or partly in cash, they are authorized, in their sole
discretion, to sell so much or all of the Net Assets of
the Trust Estate as they deems [sic] appropriate for
that purpose.

          In distributing any tangible personal prop-
erty of the Trust Estate to my children, I request my
Successor Trustee to distribute such property to my
children equally, but so far as practicable, in accor-
dance with the preference of each child. In the event
of any disagreement as to the allocation of any item of
tangible personal property, the allocation shall be
made by the Successor Trustee other than PRESTON WALKER
GRANT, JR. and KATHRYN LYNN GRANT ADAMS (the “Independ-
ent Trustee”). * * *

          (b) The term “Net Assets” shall mean the
gross assets of the Trust Estate less any taxes or
other expenses paid pursuant to the provisions of
Paragraph 11 hereof.

   *       *       *       *       *       *       *

     10. Powers Of Trustee. The Trustee and any
Successor Trustee hereunder shall have the fiduciary
powers enumerated in Section 15-102 of the Estates and
Trusts Article, Annotated Code of Maryland, as amended
from time to time, specifically including the right to
employ appropriate assistance in the administration of
the Trust, including accountants, attorneys and invest-
ment advisors.

          In addition, the Trustee hereunder shall have
the power to invest in common trust funds and uninsured
money market funds; to invest and keep the Trust funds
invested in such stocks, common or preferred, bonds,
mortgages or other property as he/she may deem advis-
able or proper, without being restricted by any manner
whatsoever as to the character of any investment by any
statute, rule of law, or Court governing the investment
of trust funds. My Trustee is authorized to borrow
funds and pledge trust property without Court approval,
and to sell, lease, or otherwise convey any property of
the Trust Estate on such terms and conditions as my
Trustee may deem advisable, and to execute such deeds,
mortgages, leases or other instruments as may be neces-
                                - 5 -


     sary or desirable to effectuate the encumbrance or
     conveyance of any trust property.

        *       *       *        *       *      *         *

          12. Court Administration. It is my express
     intention that the Trust hereby created shall not be
     administered under the supervision of any Court. * * *

          13. Maryland Law. This agreement has been exe-
     cuted by me in the State of Maryland, and all questions
     relating to its validity, construction and administra-
     tion shall be determined in accordance with the laws of
     the State of Maryland.

          14. Compensation of Independent Trustee. I
     direct that DONALD R. WILSON or such other Independent
     Trustee who serves as Successor Trustee hereunder,
     shall receive a reasonable compensation from the Trust
     Estate for his or her services.

     On October 1, 1991, the same date on which Ms. Grant exe-

cuted the declaration of trust, she executed a last will and

testament (decedent’s will).   Decedent’s will provided in perti-

nent part:

                               ITEM I

          I direct my Personal Representatives, hereinafter
     named, to pay the expenses of my last illness, funeral
     and burial, in such amount as they may deem proper and
     without regard to any limitation in the applicable
     local law as to the amount of such expense.

                               ITEM II

         All of the rest, residue and remainder of my
    estate of whatsoever kind and wheresoever situate [sic]
    I give, devise and bequeath absolutely in fee simple
    unto my children, PRESTON WALKER GRANT, JR. and KATHRYN
    LYNN GRANT ADAMS, in equal shares per stirpes.

          In distributing any tangible property hereunder to
     my children, such property shall be distributed
                                 - 6 -


     equally, but so far as practical, in accordance with
     the preference of each child.

                             ITEM III

          I grant unto my Personal Representative [sic] all
     of the powers enumerated in the Estates and Trusts
     Article, Title 7, Section 401, Annotated Code of Mary-
     land relating to powers granted to Personal Representa-
     tives.

                              ITEM IV

          I appoint my children, PRESTON WALKER GRANT, JR.
     and KATHRYN LYNN GRANT ADAMS, as Personal Representa-
     tives. * * *

     On April 2, 1994, Ms. Grant, who was still a resident and

domiciliary of Maryland, died.    After decedent’s death, Mr.

Grant, Ms. Adams, and Donald R. Wilson served as the successor

trustees of the Trust.

     Only $11,253 of decedent’s gross estate passed to her

children Mr. Grant and Ms. Adams outside of the Trust (non-Trust

property).   The non-Trust property consisted of $256 in cash and

traveler’s checks; life insurance valued at $1,025; $7,228 in a

jointly owned money market mutual fund; and $2,744 of other

miscellaneous property.   The balance of decedent’s gross estate,

which had an aggregate value of $865,480, passed to her children

pursuant to paragraph 8 of the declaration of trust (nonprobate

property).   The nonprobate property consisted of, inter alia,

decedent’s residence located at 13730 Deakins Lane, Germantown,

Maryland (decedent’s residence), stocks and bonds, five money
                               - 7 -


market mutual funds, a money market bank account, a checking bank

account, jewelry, and household effects and furniture.

     On or about January 4, 1995, Mr. Grant and Ms. Adams, as

personal representatives of the estate, filed Form 706, United

States Estate (and Generation-Skipping Transfer) Tax Return

(estate tax return), which showed estate tax due of $60,118.    In

determining that amount of estate tax due, the estate tax return

claimed a credit for state death taxes of $23,911.   The Register

of Wills, Montgomery County, Maryland, had determined that

Maryland inheritance tax of $8,663.30 was due on $866,330 of the

decedent’s nonprobate assets consisting of $405,000 of real

property and $461,330 of personal property.

     The estate tax return reported as part of decedent’s gross

estate, inter alia, the following assets:   decedent’s residence

valued as of the date of decedent’s death pursuant to an ap-

praisal at $405,000; stocks, including dividends, valued at

$263,830; five money market mutual funds with total funds,

including dividends, of $121,603; a checking bank account with

funds of $31,274; a money market bank account with funds of

$17,879; and a joint money market mutual fund with funds of

$7,228.   According to Schedule G of the estate tax return, the

value of the decedent’s nonprobate property was $865,480.    That

return also indicated that decedent did not have any debts and

that there were no mortgages or liens on any property which she
                               - 8 -


owned.   The estate tax return claimed deductions for (1) $5,481

of Schedule J expenses (“Funeral Expenses and Expenses Incurred

in Administering Property Subject to Claims”), which included

$1,865 of attorney’s fees, and (2) $48,102 of Schedule L expenses

(“Expenses Incurred in Administering Property Not Subject to

Claims”) (Schedule L).

     None of the expenses claimed in Schedule L was approved by a

Maryland court.   Those expenses consisted of:   (1) $11,250 and

$5,625 of executors’ fees paid to Mr. Grant and Ms. Adams,

respectively;3 (2) $840 of accountant’s fees paid to Donald R.

Wilson; (3) (a) $300 of appraisal fees to appraise decedent’s

residence, (b) $150 of appraisal fees to appraise certain of

decedent’s personal property, (c) $195 of appraisal fees to

appraise decedent’s jewelry, and (d) $240 of appraisal fees to

appraise decedent’s silverware; and (4) $29,5024 of miscellaneous

administration expenses (miscellaneous administration expenses).

Schedule L contained the following descriptions of the items of

miscellaneous administration expenses enumerated in that schedule

as set forth below:



     3
      The executors’ fees were calculated by multiplying an
hourly rate of $75 times (1) 150 hours in the case of Mr. Grant
and (2) 75 hours in the case of Ms. Adams.
     4
      The estate rounded the miscellaneous administration ex-
penses claimed in Schedule L to the nearest dollar. For conve-
nience, we shall do the same.
                              - 9 -


 Item                                                   Amount
Number                   Description                   Deducted
  4      Travel expenses to settle estate:
         P. Walker Grant, Jr., personal representa-
         tive
         RFD 1 Box 3031, Killington VT 05751
          4/11/94 Killington VT to Darnestown MD -       $149
                  505 mi, $2.75 tolls
          4/24-25/94 Darnestown MD to Killington VT
                     via New Haven CT to broker for
                     transfer of stocks - 534 mi,
                     $13.85 tolls, Motel 6 New Haven
                     4/24 $42.55                          212
          5/2/94 Killington VT to Darnestown MD -
                 520 mi, $2.75 tolls                      154
          6/5/94 Darnestown MD to Killington VT -
                 505 mi, $2.75 tolls                      149
          6/16/94 Killington VT to Darnestown MD -
                  505 mi, $2.75 tolls                     149
          7/14/94 Darnestown MD to Killington VT -
                  505 mi, $2.75 tolls                     149
          7/19/94 Killington VT to Darnestown MD -
                  525 mi, $4.65 tolls                     157
          8/8/94 Darnestown MD to Killington VT -
                 525 mi, $3.65 tolls                      156
          8/19/94 Killington VT to Darnestown MD -
                  525 mi, $4.65 tolls                     157
          9/22/94 Darnestown MD to Killington VT -
                  525 mi, $3.65 tolls                     156
          11/28/94 Killington VT to Darnestown MD -
                   525 mi, $4.65 tolls                    157
          12/11/94 Darnestown MD to Killington VT -
                   525 mi, $3.65 tolls                    156
                             - 10 -


 Item                                                   Amount
Number                   Description                   Deducted
  5      Travel expenses to settle estate:
         Kathryn Lynn Grant Adams, personal repre-
         sentative
         RR1 Box 6180 Plummers Ridge, Union (town of
         Milton) NH 03887
          4/3/94 Milton NH to Darnestown MD - 540
                 mi, $10.85 tolls, $5.73 food on
                 road                                    $173
          4/24/94 Darnestown MD to New Haven CT to
                   broker for transfer of stocks -
                   318 mi, $13.85 tolls, Motel 6 New
                   Haven $42.55                           149
          4/25/94 New Haven CT to Darnestown MD -
                   318 mi, $8.85 tolls, $14.26
                   food                                   115
          5/20/94 Darnestown MD to Milton NH - 540
                   mi, $14.85 tolls                       171
          5/28/94 Milton NH to Darnestown MD - 540
                   mi, $10.85 tolls                       167
          8/19/94 Darnestown MD to Milton NH - 540
                   mi, $14.85 tolls                       171
          8/25/94 Milton NH to Darnestown MD - 540
                   mi, $10.85 tolls                       167
          8/27/94 Darnestown MD to Milton NH - 540
                   mi, $14.85 tolls                       171
          9/1/94 Milton NH to Logan Airport, Boston
                 - 85 mi, $1.00 toll                       26
                 Delta Airlines - Boston to Wash. DC
                 to Boston                                 60
                 meal at airport                            4
          9/5/94 meal at Washington airport                10
                 parking at Logan Airport                  50
                 Logan Airport to Milton NH - 88 mi,
                 $2.00 tolls                               28
          9/12/94 Milton NH to Darnestown MD - 540
                   mi, $10.85 tolls                       167
          10/25/94 Darnestown MD to Milton NH - 540
                    mi, $14.85 tolls                      171
          10/28/94 Milton NH to Darnestown MD - 549
                    mi, $9.45 tolls, $5.16 food           174
                             - 11 -


 Item                                                    Amount
Number                   Description                    Deducted
  6      Geoffrey C. Adams, RR1 Box 6180 Plummers
         Ridge, Union NH 03887 - expenses of travel
         from home in Milton NH with helper, both to
         work on house
         6/10/94 to MD - 551 mi, $8.85 tolls, $29.73
                 meals                                    $198
         6/14/94 return - 470 mi, $13.85 tolls             150
         6/24/94 to MD - 565 mi, $8.85 tolls, $32.92
                 meals                                     206
         6/27/94 return - 455 mi, $13.85 tolls,
                 $22.00 meals                              168
         local miles in MD for supplies & dumping
         trash - 493 mi                                    143
  7      Aetna Casualty Co., Hartford CT
         10/21/94 Excess liability policy premium           36
  8      Banner Glass, Rockville MD
         replace glass table top - 8/15 $97.56              98
  9      Barrons, Gaithersburg MD                           97
         6/28/94 siding - $13.23
         7/6/94 shutters - $83.90
 10      Bell Atlantic/C&P Telephone                       400
         4/8/94 bill $112.39   9/8/94   bill   $32.89
         5/8/94 bill $ 58.61 10/8/94    bill   $25.74
         6/8/94 bill $ 46.63 11/8/94    bill   $25.13
         7/8/94 bill $ 41.73 12/8/94    bill   $25.48
         8/8/94 bill $ 31.82
 11      Bettar Appliance, Kensington MD                    80
         12/2/94 oven selector switch - $79.80
 12      Mark Canon, c/o Mr. & Mrs. Michael Canon          389
         RR 1 Box 33A Herricks Rd., Brookville ME
         04617
         6/11-15/94 labor & expenses: yard work,
         window cleaning, trash hauling - 38¼ hr @
         $8/hr, 11 trips to dump, misc. expenses
                                  - 12 -


 Item                                                          Amount
Number                       Description                      Deducted
  13     Steve Chorba, 314 Elm St., Milton, NH 03851            $790
         6/10-13/94 labor: yard work, window
                    cleaning - 44 3/4 hr @ $8/hr,
                    misc. expenses $400
         6/24-27/94 labor: yard work - 35 hr @
                    $8/hr, misc. expenses $350
         7/7/94 labor: unloading furniture, etc. in
                Milton NH $20
         8/31/94 labor: storing furniture in Milton
                 NH $20
 14      Christopher’s Quince Orchard Hardware,
         Gaithersburg MD - various miscellaneous
         supplies for lawn, garden & landscaping;
         painting; tile repair & grouting; window
         repairs; flagstone & concrete cleaning and
         finishing; plumbing repair; nails, screws &
         other misc. hardware                                    617
         5/04/94-$ 13.11   7/01/94-$ 4.18    9/10/94-$ 8.49
         5/16/94-$ 10.69   7/09/94-$10.67    9/13/94-$ 9.01
         6/01/94-$ 14.60   7/12/94-$ 3.04    9/14/94-$ 9.75
         6/18/94-$108.66   7/15/94-$ 3.46    9/15/94-$ 2.72
         6/19/94-$103.90   7/16/94-$ 6.07    9/30/94-$24.19
         6/19/94-$ 19.82   7/16/94-$ 6.49   10/01/94-$10.38
         6/20/94-$ 46.18   7/24/94-$ 3.48   10/01/94-$ 4.19
         6/25/94-$ 9.76    7/30/94-$ 9.97   10/08/94-$ 3.77
         6/25/94-$ 2.09    8/01/94-$ 7.56   10/09/94-$ 8.39
         6/25/94-$ 11.54   8/12/94-$19.40   10/14/94-$13.82
         6/25/94-$ 32.72   9/04/94-$46.18   10/16/94-$ 8.39
         6/29/94-$ 5.01    9/04/94-$ 0.48    9/30/94-$ 8.39
                           9/09/94-$ 6.07

 15      Color Tile, Gaithersburg MD                              15
          7/6/94 grout saw - $10.49
          8/23/94 additional blades $4.19
 16      CPI Photo, Lake Forest Mall, Gaithersburg                54
         MD
          11/9/94 duplicates & enlargements of
                  property-$54.39
 17      Crown Gasoline, Quince Orchard,                           5
         Gaithersburg MD
          5/26/94 gas for mowing - $5.00
                             - 13 -


 Item                                                   Amount
Number                   Description                   Deducted
  18     CVS Pharmacy, Quince Orchard, Gaithersburg       $18
         MD
          8/9/94 floor protectors, shelf paper -
                 $10.45
          8/11/94 floor protectors - $4.18
          10/9/94 floor protectors - $3.55
 19      Darnestown Office Products, Quince Orchard,        2
         Gaithersburg MD 10/8/94 tape - $1.88
 20      Darnestown Texaco, Darnestown MD                  13
          6/12/94 gas for mowing & trimming - $6.34
          9/2/94   ?   ?    ?    - $7.00
 21      Fisher Lumber (Leland L. Fisher, INC.),           12
         Rockville MD
          7/11/94 grouting supplies - $11.81
 22      Gaithersburg Ford-Kubota Tractor Co.,              9
         Gaithersburg MD
          9/10/94 repair parts for mower - $5.04
          9/20/94   ?      ?    ?    ?   - $4.19
 23      Gaithersburg Paint Center, Gaithersburg MD        31
          5/22/94 exterior window & trim paint &
                  supplies-$31.40
 24      Ron Gilk, Germantown MD                          336
          6/9/94 seal driveway - $336.00
 25      P. Walker Grant, Jr. reimbursement for ex-       347
         penses of moving personal property and fur-
         niture to heirs’ homes in rented truck
          7/6-8/94 gas $141.25, tolls $15.10,
                   motel $31.80
          9/5-7/94 gas $140.87, tolls $17.80
 26      Griffith-Steuart/Steuart Fuels (Div. of          590
         Griffith Consumers), Baltimore MD - heating
         oil
          3/28/94 $229.70    11/29/94 $ 76.86
          9/20/94 $101.53    12/21/94 $133.64
          11/7/94 $ 48.36
                             - 14 -


 Item                                                   Amount
Number                   Description                   Deducted
  27     Hechinger, Rockville & Gaithersburg MD          $120
          5/21/94 paint supplies- $1.46
          6/26/94 carpentry supplies- $4.43
          8/4/94 garden rake- $10.49
          8/10/94 flagstone sealer- $17.09
          8/15/94       ?      ?  - $17.09
          10/12/94 grass seed- $23.08
          10/14/94    ?    ? - $46.16
 28      Home Depot, Gaithersburg MD                      377
          5/15/94 painting supplies, primer - $28.74
          5/31/94 driveway sealer - $29.67
          6/5/94 paint & carpentry supplies - $43.63
          6/26/94 carpentry material - $13.89
          7/11/94 electrical devices & trim, door &
                  window hardware - $206.07
          7/23/94 trim & hardware items - $24.47
          8/30/94 marble cleaning & finish supplies-
                                             $20.76
          9/2/94    ?       ?     ?   ?     ? -$9.81
 29      Lizz Huntzberry, Chewsville Rd., Smithburg       355
         MD
          5/31/94 lawn mowing & trimming - $195.00
          8/8/94   ?      ?   ?    ?     - $160.00
 30      Johnson’s Flower & Garden Center, Quince          72
         Orchard, Gaithersburg MD
          7/30/94 plants & fertilizer
 31      K-Mart, Kentlands Square, Gaithersburg MD         35
          8/9/94 Perlite soil additive - $4.77
          9/7/94 bath mats - $26.23
          9/19/94 vacuum cleaner bags - $4.19
 32      Kinko’s, Gaithersburg MD                           2
         10/12/94 copies of property plat - $1.84
 33      King & Sons, Burtonville MD                      170
          6/3/94 pump & inspect septic tank -
                 $170.00
 34      Lighting Designers, Rockville MD                 143
          5/18/94 replacement front door & kitchen
                  light fixtures - $142.59
                                     - 15 -


 Item                                                                Amount
Number                       Description                            Deducted
  35     Lowe’s, Kentlands Square, Gaithersburg MD                    $203
          supplies for garden, masonry, plumbing,
          painting
         6/11/94-$ 4.28   8/07/94-$33.14       9/14/94-$12.80
         8/03/94-$ 7.56   8/09/94-$12.42       9/15/94-$10.74
         8/4/94 -$ 3.19   8/13/94-$ 6.19       9/17/94-$18.51
         8/6/94 -$45.72   9/09/94-$ 4.27      10/14/94-$31.23
         8/6/94 -$ 5.11   9/13/94-$ 7.85

 36      South T. Lynn, 13701 Deakins Lane                             200
         Germantown MD 20874
          5/31/94 Deakins Lane roadway maintenance-
                                            $100.00
         11/22/94   ?      ?     ?        ?       -
                                            $100.00
 37      Meadows Farms, Germantown MD                                  272
          9/3/94 topsoil - $271.92
 38      Montgomery County, MD, Rockville MD                         5,746
          4/22/94 additional death certificates -
                  $72.00
          9/15/94 property taxes - $5,673.69
 39      Original Custom Interiors, Herald Harbor MD                    60
          8/8/94 drapery alteration - $60.00
 40      Penn Auto, Gaithersburg MD                                      7
          5/24/94 fuses for mowing tractor - $1.57
          8/1/94 oil filler cap for tractor - $5.24
 41      J C Penney, Lake Forest Mall, Gaithersburg                     36
         MD
          9/18/94 drapes and hardware - $36.23
 42      Pepco (Potomac Electric Power Co.), Wash-                   1,571
         ington DC
         2/23/94-3/25/94   $ 76.72      7/22/94-8/22/94   $224.68
         3/25/94-4/21/94   $ 63.20      8/22/94-9/20/94   $164.97
         4/21/94-5/19/94   $ 69.26     9/20/94-10/21/94   $112.34
         5/19/94-6/21/94   $356.24    10/21/94-11/18/94   $ 52.36
         6/21/94-7/22/94   $451.52

 43      Plumbing World, Gaithersburg MD                                 5
          9/9/94 plumbing repair materials - $5.46
                              - 16 -


 Item                                                    Amount
Number                   Description                    Deducted
  44     Polyzo’s Painting Inc., Silver Spring MD        $4,750
          7/15/94 interior & exterior painting -
                                          $4,000.00
          7/26/94   ?      ?   ?        ?       -
                                          $750.00
  45     Potomac Nursery, Potomac MD                        196
          9/4/94 plants - $180.74
          9/13/94 grass seed - $15.74
  46     Potomac Valley Bank, branch at Potomac MD           45
          4/11/94 safe deposit box rental - $45.00
  47     Pro-Graf 1-HR Photo, Gaithersburg MD                58
          11/10/94 property photos developing &
                                       printing-
                                            $24.07
          11/19/94   ?          ?    ?   ?     -
                                            $33.52
  48     Rent-A-Wreck, Rockville MD                        619
          7/8/94 truck rental, move effects to NH &
                                                VT-
                                              $318.33
          9/7/94 ?        ?     ?     ?      ? ?-
                                              $300.93
 49      Safeway, Quince Orchard, Gaithersburg MD           32
          7/4/94 packing materials - $13.61
          8/10/94 plants - $6.28
          11/5/94 light bulbs - $12.14
 50      Sears, Roebuck & Co., Lake Forest Mall,            42
         Gaithersburg MD
          7/28/94 drapery traverse rod - $41.99
 51      Southern States Co-op Inc., Gaithersburg MD         4
          11/25/94 fence repair material - $3.67
 52      Staples, Rockville MD                               4
          10/9/94 masking tape - $4.47
                             - 17 -


 Item                                                   Amount
Number                   Description                   Deducted
  53     Strosniders Hardware, Potomac MD                $108
          6/11/94 window & sash cleaning materials -
                  $65.08
          6/12/94 broken window repair materials -
                  $36.04
          6/13/94 grass trimmer line - $7.33
 54      Timberidge Farm, Mt. Airy MD                       5
          11/25/94 fence repair lumber - $5.00
 55      Universal Floors Inc., Gaithersburg MD         3,505
          7/26/94 refinish hardwood floors -
                                         $1,405.00
          8/3/94    ?         ?      ?     -
                                         $2,100.00
 56      USPS                                              46
          4/8, 5/5 & 9/2/94 stamps - $40.60
          5/28/94 postage - $2.75
          10/7 & 10/19/94 postage - $1.73
          11/10/94 postage
 57      several local high school kids, full names       142
         & addresses unknown, for misc. labor
          8/13/94 move furniture-2 for 3 hrs @
                  $7/hr-$42.00
          9/4/94 yard work, windows-2 for day @ $50-
                 $100.00
 58      P. Walker Grant, Jr. - reimbursement for
         local mileage incurred in settling estate
          2101 mi @ $0.29/mi PAID                         609
 59      Kathryn Lynn Grant Adams - reimbursement
         for local mileage incurred in settling es-
         tate
          704 mi @ $0.29/mi PAID                          204
 60      Move trailer of furniture to temporary
         storage in Milton NH after sale of house -
         540 miles, estimate quoted @ $2/mi ESTI-
         MATED                                          1,080
                                - 18 -


     After decedent’s death, the Trust filed its initial Form

1041, U.S. Income Tax Return for Estates and Trusts (Trust income

tax return), for the period April 2, 1994 (the date of decedent’s

death) through December 31, 1994.    The Trust income tax return

showed, inter alia, in Schedule B (“Income Distribution Deduc-

tion”) distributable net income totaling $3,086, which consisted

of $3,006 of adjusted total income and $80 of adjusted tax-exempt

interest, and “Other amounts paid, credited, or otherwise re-

quired to be distributed” of $314,968.

     In December 1996, approximately two years and eight months

after decedent’s death, decedent’s residence was sold for approx-

imately $440,000.

     Respondent issued a notice of deficiency (notice) with

respect to decedent’s estate.    In the notice, respondent disal-

lowed executors’ fees of $16,875 and other expenses totaling

$29,502, and allowed accountant’s fees of $840 and appraisal fees

totaling $885, that were claimed in Schedule L.    In addition,

respondent allowed as Schedule L expenses $2,203 of trustees’

fees that were not claimed in Schedule L and $1,865 of attorney’s

fees that were claimed in Schedule J of the estate tax return.

                                OPINION

     The estate bears the burden of demonstrating error in

respondent’s determinations and in establishing its entitlement
                              - 19 -


to deduct under section 2053 the expenses claimed.   See Rule

142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).

     The estate contends that it is entitled to deduct under

section 2053(b) administration expenses consisting of executors’

fees totaling $16,875 and miscellaneous administration expenses

totaling $23,828.5   Respondent disagrees.

     In determining the taxable estate, section 2053(b) allows

deductions of amounts representing expenses incurred in adminis-

tering property not subject to claims which is included in the

gross estate, to the same extent such expenses would be allowable

as deductions under section 2053(a) if such property were subject

to claims, and such amounts are paid before the expiration of the

period of limitation for assessment provided in section 6501.

Section 20.2053-8, Estate Tax Regs., provides in pertinent part

with respect to the deductibility of expenses in administering

property not subject to claims:

     Usually, these expenses are incurred in connection with
     the administration of a trust established by a decedent
     during his lifetime. * * *

          (b) These expenses may be allowed as deductions
     only to the extent that they would be allowed as deduc-
     tions under the first category [of deductions set forth
     in section 20.2053-1(a)(1), Estate Tax Regs.] if the
     property were subject to claims. See §20.2053-3.     The


     5
      On brief, the estate concedes that it is not entitled to
deduct $5,674 of real estate taxes that were claimed as part of
item 38 in Schedule L of the estate tax return because those
taxes accrued before the date of decedent’s death.
                              - 20 -


     only expenses in administering property not subject to
     claims which are allowed as deductions are those occa-
     sioned by the decedent’s death and incurred in settling
     the decedent’s interest in the property or vesting good
     title to the property in the beneficiaries. Expenses
     not coming within the description in the preceding
     sentence but incurred on behalf of the transferees are
     not deductible.

          (c) The principles set forth in paragraphs (b),
     (c), and (d) of § 20.2053-3 (relating to the allowance
     of executor’s commissions, attorney’s fees, and miscel-
     laneous administration expenses of the first category
     [of deductions set forth in section 20.2053-1(a)(1),
     Estate Tax Regs.]) are applied in determining the
     extent to which trustee’s commissions, attorney’s and
     accountant’s fees, and miscellaneous administration
     expenses are allowed in connection with the administra-
     tion of property not subject to claims.

     The only dispute between the parties under section 2053(b)

is whether the administration expenses claimed as deductions

would be allowable as deductions under section 2053(a)(2).

Section 2053(a)(2), relating to expenses incurred in administer-

ing property included in the gross estate and subject to claims,

allows a deduction from the value of the gross estate of “such

amounts * * * for administration expenses * * * as are allowable

by the laws of the jurisdiction * * * under which the estate is

being administered.”   Section 20.2053-3(a), Estate Tax Regs.,

provides that amounts deductible as

     “administration expenses” of the first category * * *
     [under section 2053(a)(2)] are limited to such expenses
     as are actually and necessarily incurred in the admin-
     istration of the decedent’s estate; that is, in the
     collection of assets, payment of debts, and distribu-
     tion of property to persons entitled to it. * * *
     Expenditures not essential to the proper settlement of
                              - 21 -


     the estate, but incurred for the individual benefit of
     the heirs, legatees, or devisees, may not be taken as
     deductions. Administration expenses include (1) execu-
     tor’s commissions; (2) attorney’s fees; and (3) miscel-
     laneous expenses. * * *

     We turn first to the executors’ fees totaling $16,875 which

the estate contends are allowable as deductions under section

2053(a)(2) and therefore are deductible under section 2053(b).

The executors’ fees consisted of $11,250 paid to Mr. Grant and

$5,625 paid to Ms. Adams which were claimed in Schedule L.     In

the notice, respondent disallowed those claimed executors’ fees

but allowed deductions under section 2053(b) for $2,203 of

trustees’ fees that were not claimed in Schedule L.   On brief,

respondent concedes that, in addition to the $2,203 of trustees’

fees allowed in the notice, the estate is entitled to deduct

under section 2053(b) trustees’ fees of $3,517 and executors’

fees of $990.   Thus, respondent concedes that the estate is

entitled to deduct under section 2053 a total of $6,710 of

executors’ fees and trustees’ fees.    Consequently, the amount of

executors’ fees claimed by the estate that remains in dispute is

$10,165.

     Section 20.2053-3(b), Estate Tax Regs., entitled “Executor’s

commissions”, provides in pertinent part:

     The executor * * * may deduct his commissions in such
     an amount as has actually been paid * * *. If the
     amount of the commissions has not been fixed by decree
     of the proper court, the deduction will be allowed
                              - 22 -


     * * * to the extent that all three of the following
     conditions are satisfied:

          (i) The district director is reasonably satisfied
     that the commissions claimed will be paid;

          (ii) The amount claimed as a deduction is within
     the amount allowable by the laws of the jurisdiction in
     which the estate is being administered; and

          (iii) It is in accordance with the usually ac-
     cepted practice in the jurisdiction to allow such an
     amount in estates of similar size and character.

     In support of its position that it is entitled to deduct

under section 2053(b) executors’ fees totaling $16,875, the

estate relies in part on Md. Code Ann., Est. & Trusts, sec. 7-

601(b) (1998 Supp.) (Md. Code Ann., Est. & Trusts, sec. 7-

601(b)).   That section prescribes the maximum compensation

payable to a personal representative of an estate as follows:

          (b) Computation of compensation.--Unless the will
     provides a larger measure of compensation, upon peti-
     tion filed in reasonable detail by the personal repre-
     sentative * * * the court may allow the commissions it
     considers appropriate. The commissions may not exceed
     those computed in accordance with the table in this
     subsection.

     If the property subject to         The commission may
        administration is:                 not exceed:
     Not over $20,000 . . . . . . . . . . . . . . . . . 9%
     Over $20,000 . . . . . . . . $1,800 plus 3.6% of the
                                       excess over $20,000

     According to the estate, the maximum compensation, deter-

mined pursuant to Md. Code Ann., Est. & Trusts, sec. 7-601(b), of

Mr. Grant and Ms. Adams, the personal representatives of dece-
                               - 23 -


dent’s estate, was $32,237.6   The estate calculated that amount

as follows:

     9% x $20,000         = $1,800
     3.6% x $845,4807     = 30,437
               Total        32,237

The estate reasons that, because it claimed only $16,875 as

executors’ fees for its personal representatives, and not the

maximum compensation of $32,237 that it believes it could have

claimed under Md. Code Ann., Est. & Trusts, sec. 7-601(b), the

full amount of such compensation claimed in Schedule L of the

estate tax return, i.e., $16,875, is reasonable and allowable by

Maryland law.   According to the estate, “Meeting the tests for

allowability by local law, it [the amount of executors’ fees

claimed by the estate] is also allowable by federal law.”



     6
      The estate argues that the personal representatives of
decedent’s estate also were entitled to a commission on the
proceeds of the sale of decedent’s residence of up to 9% of those
proceeds. In support of that argument, the estate apparently
relies on Md. Code Ann., Est. & Trusts, sec. 7-601(d)(1) (1991).
That provision was repealed, effective Jan. 1, 1992, and was not
in effect when decedent died on Apr. 2, 1994, or thereafter
during the administration of decedent’s probate property. See
Md. Code Ann., Est. & Trusts, sec. 7-601(d) (1998 Supp.). In any
event, the provision on which the estate relies in Md. Code Ann.,
Est. & Trusts, sec. 7-601(d)(1) (1991) applied only to the sale
of real property subject to administration and, even as to such
real property, the personal representative was required to
petition a Maryland court and explain in reasonable detail why a
commission with respect to such a sale should have been allowed.
     7
      The estate arrived at $845,480 by deducting $20,000 from
$865,480, i.e., the value of the nonprobate property reported in
Schedule G of the estate tax return.
                              - 24 -


     We reject the estate’s position that the personal represen-

tatives of decedent’s estate would have been entitled to maximum

compensation under Md. Code Ann., Est. & Trusts, sec. 7-601(b) in

the amount of $32,237.   The maximum compensation of the personal

representative of an estate prescribed by that section is de-

signed to compensate such representative for all of the ordinary

work of administering an estate subject to administration, see

Lehman v. Kairys, 217 Md. 359, 364, 142 A.2d 546, 548 (1958);

Talbert v. Reeves, 211 Md. 275, 283, 127 A.2d 533, 538 (1956),

and is determined by reference to the amount of property subject

to administration.   The value of decedent’s property as of the

date of her death that was subject to administration was no more

than $11,253.8   Thus, the maximum compensation of the estate’s

personal representatives under Md. Code Ann., Est. & Trusts, sec.




     8
      The value of decedent’s non-Trust property as of the date
of decedent’s death was $11,253. Included within that non-Trust
property was a money market mutual fund account with a balance of
$7,228, which decedent and Ms. Adams jointly owned on the date of
decedent’s death. The parties do not address whether under
Maryland law that jointly owned money market mutual fund account
would be considered property subject to administration. We
assume for purposes of this Opinion that the jointly owned money
market mutual fund account was property subject to administration
in Maryland, an assumption which favors the estate in calculating
the maximum compensation payable to a personal representative
under Md. Code Ann., Est. & Trusts, sec. 7-601(b).
                               - 25 -


7-601(b) would have been $1,012.77 ($11,253 x 9%), and not

$32,237 as claimed by the estate.9

     We also reject the estate’s position that “Meeting the tests

for allowability by local law, it [the amount of executors’ fees

claimed by the estate] is also allowable by federal law.”    In

determining the deductibility of administration expenses under

section 2053(a)(2), the deductions claimed must be allowable not

only by the State law under which the estate is administered but

also by Federal law.    See Estate of Love v. Commissioner, 923

F.2d 335, 337 (4th Cir. 1991), affg. T.C. Memo. 1989-470; Estate

of Smith v. Commissioner, 510 F.2d 479, 482-483 (2d Cir. 1975),

affg. 57 T.C. 650 (1972); Estate of Posen v. Commissioner, 75

T.C. 355, 367 (1980).   To satisfy Federal law, the deductions

claimed as administration expenses must satisfy the requirements

of section 2053 and the regulations thereunder.




     9
      Respondent concedes that the estate is entitled to deduct
executors’ fees determined under Md. Code Ann., Est. & Trusts,
sec. 7-601(b). However, respondent made a mathematical error in
determining the value of decedent’s non-Trust property and,
consequently, made an error in calculating the maximum amount of
executors’ fees allowable under Md. Code Ann., Est. & Trusts,
sec. 7-601(b). Respondent calculated the value of decedent’s
non-Trust property to be $10,997 and the maximum compensation of
a personal representative under Md. Code Ann., Est. & Trusts,
sec. 7-601(b) to be $990 ($10,997 x 9%). In fact, the value of
decedent’s non-Trust property was $11,253, consisting of $256 in
cash and traveler’s checks, life insurance valued at $1,025,
$7,228 in a jointly owned money market mutual fund, and $2,744 of
other miscellaneous property.
                               - 26 -


     The estate contends that none of the time spent by Mr. Grant

and Ms. Adams, which was used to determine the amount of execu-

tors’ fees claimed in Schedule L, was for management of the Trust

and that all of that time was spent to settle the estate.    On the

record before us, we disagree.    Nothing in the record supports

that contention.    To the contrary, the record shows that the

value of decedent’s nonprobate property, as reported in Schedule

G of the estate tax return, was $865,480, whereas the value of

the non-Trust property was only $11,253.    The record also estab-

lishes that virtually all of the miscellaneous administration

expenses were incurred with respect to decedent’s nonprobate

property.   Based on the record presented, we believe that most of

the time spent by Mr. Grant and Ms. Adams must have related to

that nonprobate property.

     On the record before us, we find that the estate has failed

to show that it is entitled to deduct as executors’ fees under

Md. Code Ann., Est. & Trusts, sec. 7-601(b) an amount greater

than $1,012.77.10


     10
      We note that although the estate stated in Schedule L that
the executors’ fees claimed were calculated on the basis of 150
hours spent by Mr. Grant at $75 an hour and 75 hours spent by Ms.
Adams at $75 an hour, the record contains no explanation as to
how the $75 hourly rate was determined. In addition, it is
noteworthy that Mr. Grant and Ms. Adams, the personal representa-
tives of the estate and two of the three successor trustees of
the Trust, hired an attorney, an accountant, and appraisers who
assisted them in administering decedent’s estate. The fees for
                                                   (continued...)
                                 - 27 -


     The estate argues that, assuming arguendo that some of the

time spent by Mr. Grant and Ms. Adams were considered to have

been spent by them as successor trustees of the Trust, the estate

would be entitled under section 2053(b) to deduct trustees’ fees

allowable under Md. Code Ann., Est. & Trusts, sec. 14-103(c) and

(e) (1991) (Md. Code Ann., Est. & Trusts, sec. 14-103(c) and (e))

in the amounts of $1,388 and $4,327, respectively.11     Those


     10
      (...continued)
those individuals employed by Mr. Grant and Ms. Adams that were
claimed as deductions in the estate tax return were allowed as
administration expenses by respondent. Finally, we note that the
estate makes no claim that the personal representatives of
decedent’s probate estate are entitled to extraordinary execu-
tors’ fees under Maryland law. The record contains no order of a
Maryland court allowing any such extraordinary fees, nor is there
any evidence in the record showing that an application for such
an order was ever made to a Maryland court. Moreover, the
summary prepared by the estate’s personal representatives that is
part of the record and that sets forth the nature of the various
tasks performed by them and the amount of time spent on such
tasks does not establish that any such tasks were extraordinary.
To the contrary, the tasks listed in that summary establish that
the work performed by the estate’s personal representatives
constituted the ordinary work of administering decedent’s probate
estate. To illustrate, the tasks listed on the summary prepared
by the estate’s personal representatives include the following:
Find, identify, and gather information, papers, and effects;
obtain death certificates; meet with lawyer and arrange appraisal
of personal effects; meet with accountant; collect and organize
papers including checks, bills, dividend records; effect stock
transfers; prepare small estate/personal representative papers;
start inventory; arrange for house appraisal; miscellaneous
administration; miscellaneous accounting; appraisal for jewelry
and silver; preparing for estate tax return. On the record
before us, we find that the estate has failed to show that it is
entitled to any extraordinary executors’ fees under Maryland law.
     11
          We note that the declaration of trust provided that the
                                                       (continued...)
                             - 28 -


provisions of Maryland law, which relate to the calculation of

commissions for trustees, provide in pertinent part:

           (c) Corpus commissions.-–Accounting from July 1,
     1981, whether or not the trust was in existence at that
     time, commissions are payable at the end of each year
     upon the fair value of the corpus or principal held in
     trust at the end of each year as follows:
           (1) Four tenths of one percent on the first
     $250,000;
           (2) One fourth of one percent on the next
     $250,000;
           (3) Three twentieths of one percent on the next
     $500,000; and
           (4) One tenth of one percent upon any excess.
     * * *

          *     *       *       *       *       *       *

          (e) Final distribution.-–Upon the final distribu-
     tion of any trust estate, or portion of it, an allow-
     ance is payable commensurate with the labor and respon-
     sibility involved in making the distribution, including
     the making of any division, the ascertainment of the
     parties entitled, the ascertainment and payment of
     taxes, and any necessary transfer of assets. The
     allowance is subject to revision or determination by
     any circuit court having jurisdiction. In the absence
     of special circumstances the allowance shall be equal
     to one half of one percent upon the fair value of the
     corpus distributed. [Md. Code Ann., Est. & Trusts,
     sec. 14-103(c), (e).]

     Respondent concedes that the estate is entitled under

section 2053(b) to deduct trustees’ commissions in the respective



     11
      (...continued)
independent successor trustee of the Trust, Donald R. Wilson, or
such other independent successor trustee, was to receive “a
reasonable compensation from the Trust Estate for his or her
services.” The declaration of trust did not provide for any
compensation to be paid to Mr. Grant and Ms. Adams, who were to
serve with Donald R. Wilson as successor trustees of the Trust.
                                - 29 -


amounts of $1,388 and $4,332 determined under Md. Code Ann., Est.

& Trusts, sec. 14-103(c) and (e), or total trustees’ commissions

of $5,720 which includes the $2,203 of trustees’ fees allowed by

respondent in the notice.     On the record before us, we find that

the estate has failed to show that it is entitled under section

2053(b) to deduct trustees’ commissions or fees determined under

Md. Code Ann., Est. & Trusts, sec. 14-103(c) and (e) in excess of

that total amount (i.e., the total of $1,388 and $4,33212 under

those respective provisions of Maryland law).

     We turn now to the $23,828 of miscellaneous administration

expenses that the estate claimed in Schedule L and that remain in

dispute.13    Those expenses may be broken down into the following

broad categories of expenses, which were claimed for the purposes

alleged in Schedule L and enumerated in that schedule as the

following items of expense:    (1) Items 4 and 5:   travel expenses


     12
      Respondent apparently calculated the amount of trustees’
commissions allowable under Md. Code Ann., Est. & Trusts, sec.
14-103(e) as $4,332 by multiplying one-half of one percent times
$866,330, which was the value of decedent’s nonprobate assets as
determined by the Register of Wills, Montgomery County, Maryland,
in calculating inheritance tax due to Maryland. The estate
calculated the amount of trustees’ commissions allowable under
Md. Code Ann., Est. & Trusts, sec. 14-103(e) as $4,327 by multi-
plying the value of decedent’s nonprobate property that was
included in the estate tax return in decedent’s gross estate
(i.e., $865,480) times one-half of one percent. We shall accept
respondent’s concession in the estate’s favor that the estate is
entitled under sec. 2053(b) to deduct $4,332 as trustees’ commis-
sions under Md. Code Ann., Est. & Trusts, sec. 14-103(e).
     13
          See supra note 5.
                              - 30 -


of Mr. Grant and Ms. Adams for round trips from Vermont and New

Hampshire, respectively, to Maryland “to settle estate”; (2) item

6:   travel expenses of Geoffrey C. Adams “with helper,” for round

trips from New Hampshire to Maryland, “both to work on house”;

(3) items 58 and 59:   reimbursements at 29 cents per mile to Mr.

Grant “for local mileage [2,101 miles]” and to Ms. Adams “for

local mileage [704 miles]”, “incurred in settling estate”;

(4) items 10, 26, and 42:   telephone bills with closing dates

from April 8, 1994, through December 8, 1994; home heating fuel

bills with closing dates from March 28, 1994, through December

21, 1994; and electric bills with closing dates from February 23,

1994, through November 18, 1994;14 (5) items 8, 9, 11 through 15,

17 through 24, 27 through 31, 33 through 37, 39 through 41, 43

through 45, 49 through 55, and 57:     various expenses incurred

with respect to work done to decedent’s residence and/or the

effects therein, including replacing glass top table; siding;

shutters; replacing oven switch; yard work; window cleaning;

trash hauling; miscellaneous supplies for lawn, garden, and

landscaping; tile repair and grouting; window repairs; flagstone

and concrete cleaning and finishing; plumbing repairs; floor

protectors; painting exterior windows and trim; sealing driveway;



     14
      Respondent concedes that the estate is allowed to deduct
$229 for home heating fuel and $140 for electricity, which
amounts were incurred prior to decedent’s death.
                                - 31 -


carpentry work; electrical work; lawn mowing; plants and fertil-

izer; replacing front door and kitchen light fixtures; supplies

for garden; masonry; plumbing; roadway maintenance; top soil;

drapery alteration; interior and exterior painting; plants and

grass seed; drapery traverse rod; window and sash cleaning

materials; and refinishing hardwood floors; (6) items 13, 25, 48,

49, 57, and 60:   various expenses for moving furniture and other

household effects and personal property of decedent from Maryland

to New Hampshire and temporary storage of furniture in New

Hampshire after the sale of decedent’s residence in December

1996; and (7) items 7, 16, 31, 32, 38, 46, 47, and 56:    various

miscellaneous expenses, including expenses for “Excess liability

policy premium”, “duplicates & enlargements of property”; bath

mats and vacuum cleaner bags; copies of property plat; additional

death certificates; safe deposit rental; developing and printing

property photos; and postage.

     It is significant that, except for the descriptions of the

$23,828 of miscellaneous administration expenses at issue which

are set forth in Schedule L of the estate tax return, the record

is devoid of any evidence elaborating on those claimed expenses.

In the briefs that the estate filed in this case, the estate

makes various factual allegations about those expenses.   Many of

those allegations are not supported by the record in this case
                             - 32 -


and consequently have been disregarded by the Court.   See Rule

143(b).

     Section 20.2053-3(d), Estate Tax Regs., relating to deduc-

tions for miscellaneous administration expenses, provides in

pertinent part:

          (d) Miscellaneous administration expenses.
     (1) Miscellaneous administration expenses include such
     expenses as court costs, surrogates’ fees, accountants’
     fees, appraisers’ fees, clerk hire, etc. Expenses
     necessarily incurred in preserving and distributing the
     estate are deductible, including the cost of storing or
     maintaining property of the estate, if it is impossible
     to effect immediate distribution to the beneficiaries.
     Expenses for preserving and caring for the property may
     not include outlays for additions or improvements; nor
     will such expenses be allowed for a longer period than
     the executor is reasonably required to retain the
     property.

          (2) Expenses for selling property of the estate
     are deductible if the sale is necessary in order to pay
     the decedent’s debts, expenses of administration, or
     taxes, to preserve the estate, or to effect distribu-
     tion. The phrase “expenses for selling property”
     includes brokerage fees and other expenses attending
     the sale, such as the fees of an auctioneer if it is
     reasonably necessary to employ one. * * *

     On the record before us, we find that the estate has failed

to establish that the expenses claimed in Schedule L for the

travel of Mr. Grant and Ms. Adams from Vermont and New Hampshire,

respectively, to Maryland were necessarily incurred in preserving

and distributing the estate’s assets.   In this connection, the

Attorney General of Maryland has determined upon at least two

occasions that incidental expenses incurred by nonresident
                              - 33 -


executors in the course of the ordinary business of administering

an estate in Maryland, including long distance telephone calls,

hotel expenses, and airplane tickets, will not be considered

expenses necessary to protect the estate if incurred only because

the executors are nonresidents.   See 59 Op. Atty. Gen. 613 (Md.

1974); 48 Op. Atty. Gen. 419 (Md. 1963).15

     On the record before us, we further find that the estate has

failed to establish that the expenses claimed in Schedule L to

reimburse Mr. Grant and Ms. Adams for a total of 2,805 miles of

“local mileage incurred in settling estate” were necessarily


     15
      Although since those opinions of the Attorney General of
Maryland were issued there have been some changes in Md. Code
Ann., Est. & Trusts, sec. 7-601, relating to compensation of the
personal representatives of an estate, none of those changes has
had any effect on those opinions. Indeed, in 59 Op. Atty. Gen.
613 (Md. 1974), the Attorney General of Maryland cited with
approval 48 Op. Atty. Gen. 419 (Md. 1963) and 21 Op. Atty. Gen.
709 (Md. 1936) and indicated that those two latter opinions
“considered similar questions” to those being considered in 59
Op. Atty. Gen. 613 (Md. 1974). In addition, in 59 Op. Atty. Gen.
613 (Md. 1974), the Attorney General stated:

          It is our opinion that the enactment of the pres-
     ent provisions of the Estates and Trusts Article was
     not intended to substantially change the law * * * and
     that the same result as reached in the above opinions
     [48 Op. Atty. Gen. 419 (Md. 1963) and 21 Op. Atty. Gen.
     709 (Md. 1936)] should continue to prevail.

Nor did the changes to Md. Code Ann., Est. & Trusts, sec. 7-601
that were enacted after 59 Op. Atty. Gen. 613 (Md. 1974) was
issued and that were in effect on the date of decedent’s death
and thereafter through the administration of the estate change
the law considered by that opinion of the Maryland Attorney
General. See Md. Code Ann., Est. & Trusts, sec. 7-601 (1991 &
Supp. 1998).
                               - 34 -


incurred in preserving and distributing the estate’s assets.    The

record is devoid of any evidence explaining what Mr. Grant and

Ms. Adams did when they traveled over 2,800 miles in Maryland.

     The estate claims that virtually all of the other expenses

at issue were incurred (1) “to maintain, or prevent some degrada-

tion in, the condition of” decedent’s residence; (2) “for repairs

to enhance the salability of” decedent’s residence; and (3) “for

selling” decedent’s residence.16   We address first the estate’s

contention that the sale of decedent’s residence was necessary in

order to pay taxes because “the cash in the estate * * * [was]

insufficient” to do so and that therefore the expenses for the

last two purposes claimed satisfy section 20.2053-3(d)(2), Estate

Tax Regs.   We disagree.   While decedent’s estate might not have

had sufficient cash to pay taxes, it had more than enough cash

and liquid cash type assets to pay such taxes.   In this connec-

tion, the estate tax return reported as part of decedent’s gross

estate, inter alia, five money market mutual funds with total

funds of $121,603; a checking bank account with funds of $31,274;

and a money market bank account with funds of $17,879.   The

estate tax return showed estate tax due of $60,118, claimed a




     16
      Although not altogether clear from the record, it appears
that, except for decedent’s residence, most of decedent’s nonpro-
bate property was distributed by the end of 1994.
                                - 35 -


credit for State death taxes of $23,911, and claimed $53,583 of

deductions.

        On the record before us, we find that the estate had suffi-

cient cash and liquid cash type assets to pay not only taxes but

also all of its debts and expenses without selling decedent’s

residence.     We therefore reject the estate’s position that the

sale of decedent’s residence satisfies section 20.2053-3(d)(2),

Estate Tax Regs., because that sale was necessary to pay taxes.

We further find on the instant record that the estate has failed

to show that any of the expenses which it claims were incurred

“for repairs to enhance the salability of” decedent’s residence17

and “for selling” that residence18 are deductible under section

2053.

     Nonetheless, we believe on the record presented that it was

not possible to distribute all of decedent’s property, including

decedent’s residence and the household and other personal effects

located at that residence, immediately after decedent’s death.

Consequently, we find that certain expenses incurred in maintain-



        17
      On brief, the estate indicates that the expenses “for
repairs to enhance the salability of” decedent’s residence are
set forth in Schedule L as items 6, 8, 9, 12, 13 (to the extent
of $750), 14, 15, 19, 21, 23, 24, 27, 28, 30, 31, 34, 35, 37, 39,
41, 44, 45, 49 (to the extent of $18), 50, 52, 55, and 57.
        18
      On brief, the estate indicates that the expenses “for
selling” decedent’s residence are set forth in Schedule L as
items 16, 32, 33, and 47.
                                 - 36 -


ing that residence, including certain utility expenses (i.e.,

telephone, home heating fuel, and electricity provided at dece-

dent’s residence19), and in distributing those assets are deduct-

ible under section 2053 and the regulations thereunder.     See sec.

20.2053-3(d)(1), Estate Tax Regs.     In addition, on the record

before us, we find that certain expenses incurred for additional

death certificates, rental of a safe deposit box, postage, and

insurance on decedent’s residence are deductible under those

provisions.

     Based on our examination of the entire record in this case,

and bearing in mind that the estate has the burden of proving its

entitlement under section 2053(b) to the miscellaneous adminis-

tration expenses claimed, we find that the estate is entitled to

deduct $3,100 as administration expenses.20


     19
      Schedule L shows electric bills at decedent’s residence
for the period May 19, 1994, through Sept. 20, 1994, totaling
$1,197.41. For example, the electric bill for the period May 19,
1994, through June 21, 1994, was $356.24, and the electric bill
for the period June 21, 1994, through July 22, 1994, was $451.52.
Although the periods to which those bills relate covered late
spring and early summer 1994, there is no explanation in the
record why those bills were so high. One possible explanation is
that someone was living at the house during those periods.
Without further explanation as to why it was necessary to incur
such high electric bills during the period May 19, 1994, through
Sept. 20, 1994, the Court will allow only $100 per month for each
of the four months of electric bills covered by that period, or a
total of $400. The Court will allow in full the amount of the
remaining electric bills that were not conceded by respondent.
     20
          The expenses allowed by the Court consist of all or cer-
                                                       (continued...)
                             - 37 -


     To reflect the foregoing and the concessions of parties,


                                        Decision will be entered

                                   under Rule 155.




     20
      (...continued)
tain of the expenses claimed in Schedule L of the estate tax
return as items 7, 10, 11, 13, 17, 18, 20, 22, 25, 26, 29, 38,
40, 42, 43, 46, 48, 49, 51, 53, 54, 56, and 57.
