In re the Estate of Whelan ( 1980 )

OPINION OF THE COURT

Bertram R. Gelfand, S.

In this contested estate tax proceeding, the issue presented is whether the estate is entitled to a deduction in the sum of $12,332.95 for losses arising from the sale of stock during the administration of this estate. The estate defaulted on the return date of the application. With regard to losses incurred during the administration of an estate, the same deductions are allowed on the New York State estate tax return as are allowed on the Federal return pursuant to section 2054 of the Internal Revenue Code (US Code, tit 26, § 2054; Tax Law, § 955). This provision of the law provides for a deduction for losses incurred during the settlement of the estate from fires, storms, shipwrecks or other casualties or theft not compensated for by insurance or otherwise (US Code, tit 26, § 2054; Federal Tax Regulations, § 20.2054-1). Although a loss on the sale of securities might be viewed as a calamity by the beneficiaries of the estate, it is evident under the rule of ejusdem generis that it is not the type of “casualty” that can conceivably fall within the ambit of section 2054 of the Internal Revenue Code. Accordingly, it is determined that the position of the State Tax Commission is correct under the law and that the estate is not entitled to the deduction it has claimed. This deduction is therefore disallowed and the tax is fixed accordingly.