Section 2053 deductions are federal estate tax deductions allowed under Internal Revenue Code Section 2053 for administration expenses, funeral costs, claims against the estate, and certain debts and taxes. These deductions reduce the taxable estate, lowering potential estate tax liability. Qualifying expenses can include executor fees, legal and accounting costs, appraisal fees, and reasonable funeral and burial expenses. Valid, enforceable claims outstanding at death, such as promissory notes or business obligations, may also be deducted if properly documented. Section 2053 provides important relief by recognizing that settling an estate involves significant costs and that only net value should be subject to estate tax.

CPAs and estate attorneys analyze Section 2053 deductions when preparing Form 706 and advising families on settlement strategies. They track and substantiate administration costs, ensure that debts and claims meet IRS requirements, and decide whether to deduct certain expenses on the estate tax return or the estate's income tax return. Life insurance advisors may be involved when death benefits are used to pay deductible expenses, helping families understand how liquidity supports both tax obligations and settlement costs. Understanding Section 2053 deductions allows planners to present a more accurate picture of net estate tax exposure and to design insurance solutions that anticipate the real cash needs of an estate.