Estate of Marcellus L. Joslyn, Deceased. Robert D. MacDonald v. Commissioner of Internal Revenue

The executor of the estate of Marcellus L. Joslyn, deceased, appeals from a decision of the United States Tax Court rendered on August 11, 1975, and reported in 63 T.C. 478 (1975). The executor at all times has maintained his office in Santa Monica, California. Our jurisdiction is based upon section 7482 of the Internal Revenue Code of 1954. This is the second occasion upon which an estate tax problem concerning this estate has been before this court. The previous decision may be found reported at 500 F.2d 382 (9th Cir. 1974).

The issue now before us is whether expenses incurred in the sale of a particular asset of the estate to pay expenses of administration is a cost which is deductible under section 2053 of the Internal Revenue Code of 1954.

No dispute exists as to the fact that the estate had incurred extraordinary expense during its administration and that assets were required to be sold to pay those expenses. To raise the amount of cash to meet those requirements and to pay taxes it was decided to sell a portion of the capital stock of the Joslyn Company held by the estate. There were 66,099 shares owned by Mr. Joslyn at the time of his death, which were traded over the…