What debts of the decedent are deductible?
LRS-47:2404(B) provides the only deduction authorized by statute. It applies to real estate owned by the decedent that is mortgaged for an amount that exceeds 50 per cent of its appraised value. The statute allows a reduction of a decedent’s equity in the real estate by an amount equal to 20 per cent of the outstanding incumbrance. All other debts of a decedent are deductible on the basis of jurisprudence, which has held that it is only the net estate transferred at a decedent’s death which should be taxed, Succession of Henderson, 211 La 707, 30 So 2d 889.
Revised Statute 47:2404(B) allows only real estate owned by the decedent that is mortgaged for more than 50 percent of its appraised value to be deducted by reducing the decedent’s equity in the real estate by 20 percent of the outstanding mortgage. However, the court ruled in the Succession of Henderson, 211 La 707, 30 So 2d 889 that all other debts of a decedent are deductible and that only the net estate transferred at a decedent’s death should be taxed.
