Form Sch J Sch J Funeral Expenses and Expenses Incurred in Administering

Form 706 (Rev. 9-2009)

Decedent’s Social Security Number

Estate of:

SCHEDULE J—Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims
Note. Do not list on this schedule expenses of administering property not subject to claims. For those expenses, see the instructions
for Schedule L.
If executors’ commissions, attorney fees, etc., are claimed and allowed as a deduction for estate tax purposes, they are not
allowable as a deduction in computing the taxable income of the estate for federal income tax purposes. They are allowable as
an income tax deduction on Form 1041 if a waiver is filed to waive the deduction on Form 706 (see the Form 1041 instructions).
Item
number

Description

Expense amount

Total amount

A. Funeral expenses:
1

Total funeral expenses

䊳

B. Administration expenses:
1 Executors’ commissions—amount estimated/agreed upon/paid. (Strike out the words that do
not apply.)
2 Attorney fees—amount estimated/agreed upon/paid. (Strike out the words that do not apply.)
3

Accountant fees—amount estimated/agreed upon/paid. (Strike out the words that do not apply.)

4

Miscellaneous expenses:

Total miscellaneous expenses from continuation schedules (or additional sheets)
attached to this schedule
Total miscellaneous expenses

Expense amount

䊳

䊳
TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 13.)
(If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.)
(See the instructions on the reverse side.)
Schedule J—Page 23

Form 706 (Rev. 9-2009)

Instructions for Schedule J—Funeral
Expenses and Expenses Incurred in
Administering Property Subject to Claims
General. You must complete and file Schedule J if you
claim a deduction on item 13 of Part 5—Recapitulation.
On Schedule J, itemize funeral expenses and expenses
incurred in administering property subject to claims. List
the names and addresses of persons to whom the
expenses are payable and describe the nature of the
expense. Do not list expenses incurred in
administering property not subject to claims on this
schedule. List them on Schedule L instead.
The deduction is limited to the amount paid for these
expenses that is allowable under local law but may not
exceed:
1. The value of property subject to claims included in
the gross estate, plus
2. The amount paid out of property included in the
gross estate but not subject to claims. This amount must
actually be paid by the due date of the estate tax return.
The applicable local law under which the estate is being
administered determines which property is and is not
subject to claims. If under local law a particular property
interest included in the gross estate would bear the
burden for the payment of the expenses, then the
property is considered property subject to claims.
Unlike certain claims against the estate for debts of the
decedent (see the instructions for Schedule K in the
separate instructions), you cannot deduct expenses
incurred in administering property subject to claims on
both the estate tax return and the estate’s income tax
return. If you choose to deduct them on the estate tax
return, you cannot deduct them on a Form 1041 filed for
the estate. Funeral expenses are only deductible on the
estate tax return.
Funeral expenses. Itemize funeral expenses on line A.
Deduct from the expenses any amounts that were
reimbursed, such as death benefits payable by the Social
Security Administration and the Veterans Administration.
Executors’ commissions. When you file the return, you
may deduct commissions that have actually been paid to
you or that you expect will be paid. You may not deduct
commissions if none will be collected. If the amount of
the commissions has not been fixed by decree of the
proper court, the deduction will be allowed on the final
examination of the return, provided that:
● The Estate and Gift Tax Territory Manager is reasonably
satisfied that the commissions claimed will be paid;
● The amount entered as a deduction is within the
amount allowable by the laws of the jurisdiction where
the estate is being administered; and
● It is in accordance with the usually accepted practice in
that jurisdiction for estates of similar size and character.
If you have not been paid the commissions claimed at
the time of the final examination of the return, you must

Schedule J—Page 24

support the amount you deducted with an affidavit or
statement signed under the penalties of 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
estate, you may deduct this amount to the extent it is not
more than the compensation allowable by the local law or
practice.
Do not deduct on this schedule amounts paid as
trustees’ commissions whether received by you acting in
the capacity of a trustee or by a separate trustee. If such
amounts were paid in administering property not subject
to claims, deduct them on Schedule L.
Note. Executors’ commissions are taxable income to the
executors. Therefore, be sure to include them as income
on your individual income tax return.
Attorney fees. Enter the amount of attorney fees that
have actually been paid or that you reasonably expect to
be paid. If on the final examination of the return, the fees
claimed have not been awarded by the proper court and
paid, the deduction will be allowed provided the Estate
and Gift Tax Territory Manager is reasonably satisfied that
the amount claimed will be paid and that it does not
exceed a reasonable payment for the services performed,
taking into account the size and character of the estate
and the local law and practice. If the fees claimed have
not been paid at the time of final examination of the
return, the amount deducted must be supported by an
affidavit, or statement signed under the penalties of
perjury, by the executor or the attorney stating that the
amount has been agreed upon and will be paid.
Do not deduct attorney fees incidental to litigation
incurred by the beneficiaries. These expenses are charged
against the beneficiaries personally and are not
administration expenses authorized by the Code.
Interest expense. Interest expenses incurred after the
decedent’s death are generally allowed as a deduction if
they are reasonable, necessary to the administration of
the estate, and allowable under local law.
Interest incurred as the result of a federal estate tax
deficiency is a deductible administrative expense.
Penalties are not deductible even if they are allowable
under local law.
Note. If you elect to pay the tax in installments under
section 6166, you may not deduct the interest payable on
the installments.
Miscellaneous expenses. Miscellaneous administration
expenses necessarily incurred in preserving and
distributing the estate are deductible. These expenses
include appraiser’s and accountant’s fees, certain court
costs, and costs of storing or maintaining assets of the
estate.
The expenses of selling assets are deductible only if the
sale is necessary to pay the decedent’s debts, the
expenses of administration, or taxes, or to preserve the
estate or carry out distribution.