By Kathleen Ford Bay, Esq.
Lippincott Phelan Veidt PLLC, Austin, TX
Section 642(c)(2) and the applicable Treasury regulations allow an estate to take a charitable contributions deduction on its fiduciary income tax return for "income in respect of a decedent" (IRD) before the IRD is actually distributed to the charity, if, "under the terms of the governing instrument and the circumstances of the particular case the possibility that the amount set aside, or to be used, will not be devoted to such purpose or use is so remote as to be negligible."1 [Emphasis added.] In Estate of Belmont v. Commissioner,2 the Tax Court concluded that IRD was not permanently set aside for the charity where the executor of an estate knew that the possibility was not "so remote as to be negligible" that the funds it claimed to have set aside for charity would end up being used for legal fees in connection with estate litigation.