For a decedent's estate, the depreciation deduction is apportioned between the estate and the heirs, legatees, and devisees on the basis of the estate's income allocable to each. If the trustee is required to maintain a reserve, the deduction is first allocated to the trust, up to the amount of the reserve. Any excess is allocated among the beneficiaries in the same manner as the trust's accounting income. For mineral or timber property held by a decedent's estate, the depletion deduction is apportioned between the estate and the heirs, legatees, and devisees on the basis of the estate's income from such property allocable to each. If the trustee is required to maintain a reserve, the deduction is first allocated to the trust, up to the amount of the reserve.
Any excess is allocated among the beneficiaries in the same manner as the trust's accounting income.
The deduction for amortization is apportioned between an estate or trust and its beneficiaries under the same principles for apportioning the deductions for depreciation and depletion. The deduction for the amortization of reforestation expenditures under section 194 is allowed only to an estate. State income taxes and business expenses that are allocable to tax-exempt interest are deductible. A reasonable proportion of expenses indirectly allocable to both tax-exempt income and other income must be allocated to each class of income. The statement must be filed before the expiration of the statutory period of limitations for the tax year the deduction is claimed.