Estate of Emilia W. Olivo, Deceased, Anthony M. Olivo, Administrator, Petitioners

T.C. Memo. 2011-163 UNITED STATES TAX COURT ESTATE OF ElvILIA W. OLIVÒ, DECEASED, ANTHONY M. OLIVO, ADMINISTRATÒR, Petitioner V: COMMISE IONER OF INTERNAL REVENUE, Respondent Docket No. 15428-07.

Filed July 11, 2011.

John R. Crayton, for petïrtioner.

Kristina L. Rico, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

WELLS, Judge: Respondent determined a deficiency in the Federal estiate tax of ¯the. Estate of Emilia W. Olivo (the estate) of $348,852.05 and a penalty Ôf $13,309.29 pursuant to section 6662(g) .I After concessions, the issues we must decide are:

(1) Whether the estate is entitled to deduct as an expense the claim on the estate tax return for services rendered by Anthony M.

Olivo (Mr . Olivo) , the son of Emilia W . Olivo ( decedent ) , to decedent before her death; (2) whether the estate is entitled to deduct the administrator's commission paid to Mr. Olivo; and (3) whether the estate is entitled to deduct the accountant's and attorney's fees claimed by Mr. Olivo.

FINDINGS OF FACT

Some of the facts and certain exhibits have been stipulated.

The parties' stipulations of fact are incorporated in this opinion by reference and are -found accordingly.

Decedent died intestate on April 26, 2003. At the time of her death, decedent was a widow who resided in Haddonfield, New Jersey. Decedent was survived by four children: Mr.. Olivo, Matthew P. Olivo (Dr. Olivo), Marcia O. Hamilton (Ms. Hamilton), and Emilia H . Glaes (Ms . Glaes ) .

Mr. Olivo, the administrator of the estate, resided with decedent at the time of her death and had provided care for her for many years before her death. Mr.« Olivo began providing nearly full-time care for decedent -and her late husband,e Matthew Unless otherwise indicated, section references are to the Internal Revenue Code of 1986 (Code) , as amended and in effect as the date of decedent's death, and Rule references are to the of Tax Court Rules of Practice and Procedure .

W. Olivo, his parents (we sometimes refer to Matthew W. Olivo as his father)., arotnd September 18, 1994, when decedent fell and suffered a compr ssion fracture of her lower spine that left her nearly paralyzed in both legs. At that time, Mr. Olivo's father was already havirg severe health problems, including insulin- dependent diabetes and congestive heart failure. His father had suffered a heart attack in the early 1990s and underwent several medical prdcedures on his heagt, including an open-heart bypass surgery.

Around the time of decedent's fall during September 1994, Mr. Olivo began to find it increasingly difficul~t to maintain his practice as an attorney.

He had received his J.D.

from'Rutgers University School of Law (Canden) in 1976 and his LL.M.

in taxation from New York University School of Law in 1979,. Mr.

Olivo practiced law at private firms in Cherry Hill, New Jersey, from 1976'untile 9885 when helbegan his own practice.

~ However, his solo practice began to disintegrate during the mid-1990s, in part because of he amount of time he devoted to his'parents' health problems.

He earned"n significant income from hi's law practice during the period when he was caring for- his parents, from 1994, through 2003.

Mr. Olivo prepared a durable power of attorney for his father, which his father execúted on February 15, 1995.. Mr.

Olivo's father'died test'ate oþ September 21, 1995. His will designated decedent and Dr. Olivo as coexecutors of his estate.

The probating of- Matthew W. Olivo' s will was apparently quite contentious, . and a New Jersey, court ultimately hady to intervene and appoint Ms . Hamilton as administrator of, the estate . During that period, -Mr. Olivo represented decedent, and he prepared a durable power -of attorney for her, which she executed on February 27, 1996.

Family relationships remained strained for several years af ter his f ather' s death, and decedent and Dr . Olivo. were estranged for a while, but family relationships were generally restored -by the year. 2000 .

Decedent had numerous health problems during the last tyears of her ,life.

The compression fractures to her, spine left her a incapable of caring for herself and ,basically paralyzed ein both legs . Mr . Olivo had to use a sliding. board to move decedent in and out of bed.

He found it difficult to move-her using ,the sliding board because she was very overweight at that, time.

As a result, he eventually purchased a Hoyer lift, « which -made it easier to move her from bed to her wheelchair and back. . She also required assistance- to use the bathroom, to get dressed, and to bathe. Decedent suffered from a numbere of urinary tract infections and, during 1995, she developed incontinence, which required Mr. Olivo to clean up after her and change her clothes Decedent was diabetic and became insulin-dependent - during 1999, which required Mr. Olivo to test the insulin levels in her bloód, several times each day and, if needed, inject her with insulin.

Mr. Olivo was also responsible for preparing all meals and doing general housekeeping.

He employed home health aids to assist him, but the aids were not registered nurses and therefore could not administer decedent's medications or, do the blood sticks and insulin injectiors she required.

He was also frequently -unable to get aids to help him on -th weekends, and they were not' available at all hours.

Mr. Olivo kept extensive records of decedent's medications, hospital visits, and diagnoses.

He also kept a composition notebo'ok where he recorded her blood sugar levels, blood.

press re, pulse, and body temperature.

He- took those a measurements two to three times each day.

He also used the composition notebook to keep track of decedent's bodily functions and of when he applied dermatological cream to rashes and sores she developed from being bedridden.

He recorded observations in the composition book about se en times each day.

Decédent's other health problems included hyperparathyroidism, hyperthyroidism, hypertension, osteoporosis, and chronic deep vein thrombosis.

She also had periodic bouts with pneumonia, and she developed congestive heart failure and coronary artery disease during the last several years of her life.

She was hospitalized approximately 25 times during the last decade of her life.

Caring for decedent took a toll on Mr. Olivo.' At some point during'1998,. Dr. Olivo became concerned about Mr. Olivo's'health.

Mr. Olivo had been losing weight, and,his sleep was frequently interrupted by decedent's needs.

In fact, die had been,sleeping on the couch with his clothes on every night. «During 1998, as a result of his concern about Mr. Olivo's health, Dr. Olivo had ra.

conversation about decedent's care with decedent and Ms.

Hamilton. Dr. Olivo believed that his brother,. Mr.s Olivo, was providing excellent care for decedent, and his only concern was that Mr. Olivo not injure his own health.

Dr. Olivo, Ms. -Hamilton, and.decedent subsequently had a conversation with Mr. Olivo about his care for decedent. Mr.

Olivo was upset about criticism he had received from Ms . Glaes and hesoffered to stop providing such care and to hire round-the- clock nurses instead. Dr. Olivo, Ms. Hamilton, and,decedent asked Mr. Olivo to continue caring for decedent; which he agreed to do.

Mr. Olivo continued to care for -decedent until her death on April 26., 2003. After her death, Mr. Olivo began to prepare an inventory of herr estate, and he sought to be the estate's administrator by requesting that his siblings renounce,their rights to 'that position. However, Ms. Glaes refused to do so until August 2004, at which point she apparently relented, and Mr. Olivo was appointed administrator of the estate.

By that point, Mr. Olivo had already filed the estate's tax return, which the IRS teceived on July 31, ½004.

On that return, he claimed a deduction of $44;200, which hê calculated was the statutory amount to which te would be entitled as a commission for hiss services as admir.istrator of the estate.

He also estimated attorney's fees of $50,000, which he calculated on an hourly rate of $150 and accountant's fees of $5,000 Finally, he also claimed a deduction of $1,240,000 as a debt the estate owed to him for the care he provided to decedent pursuant to an alleged agreement he had with her to compensate him for his services in caring for her (Elleged agreement).

When he filed the estate s return, Mr. Olivo had not actually been pajd an administrator's commission- and the attorney's fees te claimed on the estate tax return on behalf of the estate.

On September 23,12006, Mr. Olivo wrote a $44,200 check ifrom the estate to himself in payment of- an administrator's commission.

From December 31, 2004, "to"December 31, 2008, Mr.

Olivo wrote himself a series of checks from the estate to -pay for attorney's fees ind litigation expenses.

Those checks totaled $55,400.

The estate has not actually paid Mr. Olivo any of the $1,240,000 claimed as a deduction on the return pursuant to the alleged agreement. The'probate court has neither finalized the administrätion of the estate nor approved the payment of any expenses.

On or about April 6, 2007, respondent issued and mailed a notice of deficiency to Mr. Olivo, as administrator of the estate.

On behalf of the estate, Mr. Olivo timely filed a petition with this Court.

OPINION

Burden of-Proof In general, the Commissioner' s determinations are -presumed correct, and the taxpayer bears the burden of proving otherwise.

Rule 142(a); Welch v.»Helvering, 290 U:.S. 111, 115 (1933).

However, section 7491(a) places the burden* of proof on the Commissioner with respect to any factual issue relevant to a taxpayer's liability for tax if:

(1) The taxpayer introduces credible 3eyidence with respect to such issue; and (2) the taxpayer satisfies certain other conditions, including substantiation of any item, proper maintenance* of all required records, and cooperation with the Government's requests for e - witnesses,«documents, and the like. , Sec. 7491(a) (2); see also Rule 142 (a),(2)-.

Taxpayers bear .the burden of proving that they have met the requirements of section 7491(a). sRolfs v.

Commissioner, ,135 T.C. 471, 483 (2010).

The estate contends that the burden of proof has shifted to respondent pursuant to section 7491(a). However, as we discuss below, the only evidence the estate produced to -substantiate any of the claimed deductions was the testimony of Mr. Olivo.

The estate failed to provide a written contract or any other documentary or corroborating evidence to substantiate the alleged agreement,-and it-¯failed to provide any records or other written documentation or other corroborating evidence to ¯show how much legal work Mr. OJ:ivo provided for the estate. Overall, the evidence, in the form of testimony, provided by the estate to substantiate its deductions is not credible within the meaning of section 7491(a). Consequently,. we conclude that the burden of proof has not shifted to respþndent with respect to-any factual issue pursuant to section 749 L (a) .

The Claimed Deduction Based Upon the Alleged Agreement and Alternatively Quantum Meruit Section 2051(a) provides that the value of the taxable estate shall be determined by deducting from the value of the gross estate such amounts for claims against the estate and administration expenses as are allowable by the laws of the jurisdiction under which the estate is being administered.

Administration expenses include executor's commissions; attorney's fees, including those fees associated with contesting an asserted deficiency; and miscellaneous expenses such as appraiser's fees, accountant's fees, and court costs.

Sec.

20.2053-3, Estate Tax Regs.

Ne first consider the estate's contention that it is entitled to deduct $1.24 mill on to pay Mr. Olivo for decedent's care pursuant to the alleged agreement. Regarding the alleged agreement between Mr. Olivo and decedent, Mr. Olivo testified that at some point during 1998, he learned« that one of his sisters, Ms. Glaes, had made a comment that all he did was sit around and watch television while getting free -room and;board.

He was upset by the remark, and he told decedent about it when she noticed that he was upset. Mr. Olivo testified that decédent subsequently offered to pay him $1,000 per -week for the care- giving ,that he provided for her. Mr. Olivo further testified that he suggested that $200 per day would be agreeable to hiní.

However, he additionally testified that during the next several days, he became worried about her finances, and he suggested to her that she not pay him anything then but that she defer the payment until -her death. Mr. Olivo also testified thats decedent agreed to his suggestion but that, to avoid a complicated interest calculation, she agreed to-pay him $400 per day, all of which would be deferred until her death. However, Mr. Olivo never reduced the alleged agreement to writing.

He acknowledged during his testimony at trial that he "could have and should have" memorialized their agreement, but he was too distracted by the day-to-day details of caring for decedent.

He explained that- he was not thinking like a lawyer during that time.

The only evidence the estate offered to prove the alleged agreement was the testimony of Mr. Olivo. Mr. Olivo never a reduced the alleged agreement to writing, nor were there any 4 11 - other witnesses to the alleged agreement or any other corroborating evidence.

We ne d not accept testimony that is improbable, self-serving, and uncorroborated by other evidence.

See, e.g., Baird v. Commissioner, 438 F.2d 490, 493 (3d Cir.

1970), vacating T.C. Memo. 1969-67; Shea v. Commissioner, 112 T.C. 183, 189 (1999); Tokarski v. Commissioner, 87 T.C. 74, 77 (1986).

Moreover, under New Jersey law, the oral promise of a decedent must be proved by clear and convincing evidence. N.J.

Stat. Ann. sec. 2A:81-2 (West 1994); Haynes vs First Natl. Stäte Bank, 432 A.2d 892, 901 n.⁶ (N.J. 1981).

The clear and convincing evidence standard requires the trier of fact to have • "'a*fiim belief oc conviction as to the truth of the allegations sought to be estaalished.'" Abbott ex rel. Abbott v. Burke, 971 A.2d 989, 1046 (N.J. 2009) (quoting Liberty Mut.

Ins. Co. v.

Land, 892 A.2d 1240, 1244 (N.J. 2006)).

We need not decide whether to apply New Jersey's clear and convincing standard - because we conclude, on the båsis of our analysis below, that Mr³ Olivo's testimony fails to satisfy even the less exacting preponderance standard normally applied by this Court.² 2Although the standard of proof normally applied in Tax the evidence, when we are Court cases is a preponderance of applying State law, we have often applied the standard of proof under State law. (1986) because we conclude that the estate's claim fails to satisfy even (continued...)

(and cases 'cited thereat). However, as stated above, See Ward v. Commissioner, 87 T.C. 78, 93 n.⁴ Mr. Olivo's testimony recounting the facts surrounding the alleged agreement strikes us as shighly questionable. Although we understand that Mrs Olivo had a lot on his mind during, the years when he was caring for his parents, his claim that he was unable to think like a lawyer during that period is belied by the fact that he; prepared powers of attorney for both of his parents and had them execute those powers of attorney during 1995 and 1996.

Given Mr. Olivo's training and experience as an attorney, given how contentious the probating, of his father's estate .had been, given the apparent animosity between Mr. Olivo ands Ms. Glaes, -and given Mr. Olivo's vested interest in ensuring that he would receive compensation from decedent pursuant to the alleged , agreement, we find it -difficult to believe that helwould not have reduced the alleged agreement to writing or at least have some corroborating evidence beyond his self-serving testimony.

In light of the,foregoing, we decline to accept Mr. Olivo's uncorroborated testimony regarding the .alleged agreement .

Accordingly, we conclude that the estate has failed to establish that decedent entered into the alleged agreement with Mr. Olivo.

Consequently, we hold that Mr. Olivo's claim for compensation 2 ( .

.

. continued) the preponderance-standard, we need not decide whether toa apply New Jersey' s clear and convincing standard to the existencesof the oral promise.

See id.

a pursuant to the alleged agreement may not be~ deducted by the estate .

.

In the alternative the estate contends that Mr. Olivo is e entitled to some recovery under quantum meruit.

Even in the absence of a contract, when one party has conferred a benefit on.

another and the circumstances are such that it would be inequitable to deny recovery to- the party conferring the benefit, New Jersey courts allow recovery-in quasi-contract. Weichert Co.

Realtors v. Ryan, 608 A.2d 280, 285 (N.J. 1992).. Quantum meruit is a type of quas i-contractual recovery that allows a plaintif f to recover the re asonable value of services rendered when the plaintiff conferring the services had a reasonable expectation of payment.

Id.

To recover under a ftheory of quantum meruit, a plaintiiff must establish:

"' (1) the performance of services in good faith, (2) t he acceptance of the services by the ,person to whom =they are rendered, (3) an.expectation of compensation therefor, and (4) the reasonable value of the services.'" Starkey, Kelly, Blaney & White v. Estate of Nicolaysen, 796 A.2d 238, 242-243 (N.

. -20 02) (quo ing Longo v. • Shore & Reich; Ltd .

,

Mr. Olivo's care for decedent during the last years of her life was extraordinary, and the efforts he expended lon:her behalf are commendable . However, we conclude that the estate has not established that Mr. Olivo is entitled to recover for that care under -quasi-contract because it has not shown entitlement under New Jersey law.

There is a presumption under New Jersey law that services rendered to a family member living -in the same household are rendered gratuitously.

The New Jersey Supreme Court has explained the presumption as follows:

the In order to the law will the services.

living as one household, imply a promise upon the part of the plaintiff must affirmatively "Ordinarily, where services are rendered and voluntarily accepted, recipients to pay for them; but where the services.are rendered by members of a family, to each other, i there will be no such implication from the mere e rendition and acceptance of recover for the services, show either that an express contract for remuneration existed or that the circumstances under which ,the . services . were rendered were such as exhibit a reasonable and proper expectation that there would be 'compensation. this exception to the ordinary rule is that the household family relationship is presumed to abound in reciprocal acts of kindness and good will, which tend to the mutual comfort and convenience-of the members of gratuitously performed; and, where that relationship appears, service does not arise because the presumption, which supports such implication, that between members of a household services are gratuitously-rendered. well of from which the plaintiff must the .ordinary implication of a promise to pay fors is nullified by the presumption leaves the case in equipoise, the services,, and assa o the family relation, remove it, "or fail."

the family, and are The areason of The proof 'of * .

Waker v Bergen, 132 A. 669, 669-670 (N.J. 1926) (quoting Disbrow v. Durand, 24 A. 545,2546 (N.J. 1892))e. * Applying New Jersey law to the instant case,3 we must presume that Mr." Olivo's services were gratuitous unless the estate can prove by a prepondenance of the evidence that Mr. ,Olivo was sentitled to recompense -for his 3The standard of proof is by a preponderance of the evidence regardless of whether the New Jersey law presumption applies.

15 - services . Children do provide gratuitous care for their aging parents.

Indeed, it is uncontested that Mr. Olivo provided care to his parents from 1994 until 1998 with no expectation of compensation. Other than the testimony of Mr. Olivo, the estate has offered no other evidence that Mr. Olivo's services beginning in 1998 were not gratuitous só as to overcome the New Jersey law presumption that the services were gratuitous.

As with Mr.

Olivo's uncorroborated, self-serving testimony regarding the alleged agreement., we decline to accept Mr . Olivo' s testimony to establish that the services he performed were not gratuitous.

Moreover, the est-ate has made no payments to Mr . Olivo to compensate him for decedent' s care, the probate court has not authorized any such payments, and the record contains no evidence that Mr. Olivo hé.s made any claim against the estate for his services. Consequently, we hold that the estate is not entitled to deduct any re<tovery under quasi-contract for the services Mr.

Olivo rendered to decedent du ing the last years of her life.

The Claimed Deduction for Adm nistrator' s Commission Ne next con ider whether the estate may deduct the administrator's <:ommission paid to Mr. Olivo. When Mr. Olivo filed the estate" s tax return, he had not yet been paid an administrator's <:ommission.

For decedents who died before October 20, 2009, the regulations provide that a deduction for an administrator's <:ommission will be allowed on the final audit of the return, even if the commission has not actually yet been paid or fixed by a decree of the proper court, so slong as three conditions are met:

(i) The district director is reasonably satisfied that the commissions claimed will be paid; (ii) The amount claimed as a deduction is within the the jurisdiction in which amount allowable by the laws of the estate is being administered; and (iii) It is in accordance with the usually accepted practice in the jurisdiction to allow such.an amount estates of similar size and character.

in Sec. 20.2053-3(b) (1), Estate Tax Regs.

Respondent contends, citing In re Linn' s Estate, 199 A. 396 Y (N. J." 1938 ) , In re Smith' s Estate , 153 A . 647 (N . J. 1931) , and In re Jula's Estate, 130 A. 733 (N.J. 1925), that the amounts paid to Mr. Olivo are not deductible because New Jersey law requires that those amounts be approved by a probate court .

We do not agree.

An amendment to N.J. Stat. Ann. sec. 3B:18-14.

(West 1983 & Supp. 2011) enacted during 2000 clarifies that, under New Jersey law, the commissions fixed by statute do not require judicial app9oÔai.⁴ Rather, that statute provides that commissions fixed by statute may be _reduced by the court 4The statements accompanying the bill amending the statute specifically noted that the amendment was intended to repudiate a position taken by the Internal Revenue Service at that time, and 'taken by'respondent commissions were not allowed under New Jersey law until approved by a probate court. S..B. 952, 209th Leg.

Assemb. B. 2049, 209th Leg. (N.J. 2000) .

that administrator's in this case, (N.J. 2000) ; i.- 17 - only upon application byta beneficiary adversely affected upon an affirmative showing that the services rendered were materially deficient or that the actual pains, risk of the fiduciary in settling the estate were substantially less. than generally required for estates of domparable size.

trouble and Id. Unless a beneficiary objects to the commissions and proves that they are excessive, the statutory formula determines the amount of commission that will be allowed. Consequently, under current New Jersey law, in the absence of a judgment from the probate court directing otherwise, the allowable administrätor's commissions are determined as follows:

5 percent on the first $200,000 of the estate; 3.5 percent on the excess over $200,000 up to $1 million, and 2 percent on the excess over $1 million.

Id.

Applying the statutory formula to the estate value of $1,711,163.81 reported on the return yields an administrator's commission of $52,223.28. Mr. Olivo testified that he used the statutory formula to calculate the deduction he claimed on behalf of the estate on its return. However, the estate claimed a deduction of only $44,200.

In its brief, the estate contends that Mr. Olivo made a calculation error.

It is unclear whether the estate will pay Mr. Olivo the difference between the amount calculated by applying the statutory formula and the amount actually paid. Pursuant to the regulations, for the difference to be deductible by the estate, the amount must actually be paid or the district director must be "reasonably satisfied" that such amount will be paid.

See sec. 20.2053-3(b) (1),a Estate Táx Regs In the instant case, we 'hold that the parties shall use the foregoing formula to calculate the administrator' s commission that the estate is entitled to deduct under New Jersey law.

However, if the estate does not actually pay Mr. Olivo the difference between what he has already been paid and the amount permitted under the statutory formula, the estate shall be allowed to deduct only the amount actually paid unless the parties agree otherwise in the Rule 155 computations, which we order below.

The Claimed Deduction for Attorney's Fees Finally, we consider whether the estate is entitled to deduct $55, 40 0 in accountant ' s and attorney' s f ees actually paid to Mr. Olivo.

The regulations in effect at the time of decedent's death provided that attorney's fees of an estate are allowable on the final audit of its return even if not yet paid, nor awarded by the proper court, as long as the district director is reasonably satisfied that the amount claimed will be paid and that it does not texceed a reasonable remuneration for the services rendered, taking the estate.and the into account the sitze and character of local law and practice.

Sec. 20.2053-3(c) (1), Estate Tax Regs. Additionally, a deduction "for reasonable attorneys' fees actually paid in contesting an asserted deficiency * * * will be allowed even though the 19 - deduction, as such, was not claimed in the estate tax return".

Sec. 20.2053 3(c) (2), Estate Tax Regs.

Réspondent does not contest -that the attorney's fees incurred by the estate in contesting the determined deficiency before this Court are deductible, and we.see no reason why they should not be deductible. Accordingly, we conclude that those attorney's fees are deductible by the estate."

Respondent contends that the estate is not entitled to the $55,000 deduction claimed on its return for attorney's and accountant's fees because it has not substantiated those fees.

On th'e estate's return, Mr. Olivo estimated and deducted $50,000 for attorney's fees and $5,000 for accountant's fees.

.However, according to Mr. Olivo's testimony, the actual payments the estate made for expenses totaling $55,400 were all for legal fees or reiinbursements.

It does not appear from the record that any accounting fees were incurred.- Accordingly, we will streat all those fees together as legal fees.

New Jersey law provides -that, where the administrator of an estate is also an attorney and performs legal work in -addition to his services as administrator he wil-1 be entitled to- a reasonable legal fee in.addit on to the administrator's commission. N.J. Stat. Ann. gec. 3B:18-6 (West 1983 -& Supp.

sthe amount of those attorney's fees shall be included in the Rule 155 computations that we order below.

2011) :

The burden is on the attorney to substantiate the legal fees claimed, and New Jersey courts will consider a number of factors in determining whether those amounts are reasonable, including:

The size and coinplexity of the estate; the time :

required to complete necessary legal work; the degree of legal skill- required to complete that work; whether the estate was involved in any litigation and the outcome of that litigation; and any other factors the court considers important.» In re - Estate of Simon, 226 A.2d 639, 641 (N.J. Super. Ct. App. Div.

196'7/); In re Estate of Bloomer, 129 A.2d 35, 37 (N.J. Super. =Ct App. Div., 195'7); In re Turnbull,

In re Estate of- Simon, supra eat 642 We apply the standards set forth in New Jersey law in deciding the deductibility -of the attorney's fees by. the estate in the instant case.

The record shows that Mr. Olivo did perform some legal services for the estate, in addition to his' services as administrator.

. For instance, he filed the estate's tax return handled the IRS examinat;i.on on behalf of the estate, and filed the estate's original petition with this Court. However, the record does not establish the value of his legal services. Mr.

Olivo testified that the $55,400 rinrattorney's fees claimed by the estate and p id to him included:

$300 for an appraisal of decedent's home; $200 for the surrogate's fee to initiate the administration of the estate; $40 in filing fees for releasing the funding bonds ; and $60 for filing the petition in this Court.

Mr. Olivo testified that the remaining $54,800 consisted of payments for legal services he rendered to the estate. However, Mr. Olivo kept nc. records of jher time he spent performing legal services for the estate.

Instead, he merely estimated the number of hours and used. a billing rate of $150 per hour.

On accound of the lack of corrcborating evidence in the record concerning the attorney's fees issue, we decline to accept Mr. Olivo's estimates of the amount of time he spent performing legal services for the estate.

Where a taxpayer has established that a deductible expense has been paid but not substantiated the amount, we may estimate the amount, bearing heavily against the taxpayer "whose inexactitude is cf his own making." Cohan v. Commissioner, 39 F.2d 540, 544 (2d Cir. 1930). However, if the evidence provides us no |basis on which to make an estimate, we will not allow any deductiion. Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985).

The record provides a paucity of evidence from which we could make any estimate as to the amount of specifically legal work performed by Mr. Olivo. Accordingly, we are unable to estimatie the amount of attorney's fees that the estate may be'entitled to deduc t ine payment f or Mr . Olivo ' s services . However , we conc lude that the estate is entitled to deduct $600 for the administrative fees for appraisals -and various filings. Additionally,eas stated above, sit is entitled to deduct the amount of attorney's fees it incurs in contesting the deficiency in the instant case.

In reaching the' foregoing holdings, we have considered alle of the parties' arguments, and to the extent not addressed herein, we 'conclude that they are moot, irrelevant, or without merit.

To reflect the foregoing Decision will be entered under Rule 155.

1. N.J. Misc. 41, 41-42 (1923) In determining the appropriate value for legal fees where tthe attorney was also the executor or administrator of the estate the court must. distinguish between those duties -that actually required legal expertise and those that were performed ass executor or administrator.
25. F.3d 94., 98 (2d Cir. 1994) ) .