MANAGEMENT

Detailed explanation-1: -A deduction from the gross estate is allowed for funeral expenses, administration expenses, claims against the estate, certain taxes, and unpaid mortgages or other indebtedness allowable under the local law governing the administration of the decedent’s estate ( Code Sec.

Detailed explanation-2: -Following Losses are Not Deductible from Business Income Loss incurred due to damage, destruction, etc., of capital assets. Loss incurred due to sale of shares held as investment. Loss of advances made for setting up of a new business which ultimately could not be started.

Detailed explanation-3: -The gross estate consists of the value of all property (real or personal, tangible or intangible) owned by a decedent or in which the decedent had an interest at the time of death. See I.R.C. § 2031(a). Generally, assets are included in the gross estate at their fair market value on the date of the decedent’s death.

Detailed explanation-4: -Adjusted gross estate is the net worth of a deceased person’s estate outstanding debts and administrative costs. Taxes are levied on the adjusted gross estate minus value of any mortgages that may be present in the estate.