Updated October 18, 2026. Quick answer: Schedule J lists funeral expenses and the cost of administering property subject to claims. Schedule L lists casualty losses during administration and the cost of administering property not subject to claims. Each is filed only if the matching deduction is claimed in Part V, and the amounts come from bills, receipts and court or fee records.
When each schedule is filed
For Schedule J the instructions say: “Complete and file Schedule J (Form 706) if you claim a deduction on Form 706, Part V, item 14.” For Schedule L: “Complete Schedule L (Form 706) and file it with the return if you claim deductions on Form 706, Part V, item 19 or item 20.” Both schedules carry a caution for expenses that are not yet deductible: “Use Schedule PC (Form 706) to make a protective claim for refund for expenses that are not currently deductible under section 2053.” The return is explained on the Form 706 page.
Schedule J: what to itemize
The instructions say to “itemize funeral expenses and expenses incurred in administering property subject to claims”. “List the names and addresses of persons to whom the expenses are payable and describe the nature of the expense.” The dividing line with Schedule L is stated directly: “Do not list expenses incurred in administering property not subject to claims on this schedule. List them on Schedule L (Form 706) instead.”
A cap applies. “The deduction is limited to the amount paid for these expenses that is allowable under local law but may not exceed” two amounts: “The value of property subject to claims included in the gross estate, plus” and “The amount paid out of property included in the gross estate but not subject to claims.” On the second amount, “This amount must actually be paid by the due date of the estate tax return.” Which property is subject to claims is a local law question: “The applicable local law under which the estate is being administered determines which property is and is not subject to claims.”
Schedule J: line by line
Funeral expenses go on line 2. “Itemize funeral expenses on line 2.” “Deduct from the expenses any amounts that were reimbursed, such as death benefits payable by the SSA or the Veterans Administration.” “List the deductible amount of each expense in column (iv).” The instructions add that “Funeral expenses are only deductible on the estate tax return.” That rule is why the funeral costs and the estate page treats them as an estate item.
Executors’ commissions go on line 6a: “you may deduct commissions that have actually been paid to you or that you expect will be paid on line 6a”. “Do not deduct commissions if none will be collected.” “Executors’ commissions are taxable income to the executors.” Attorney fees go on line 6b: “Enter the amount of attorney fees that have actually been paid or that you reasonably expect to be paid on line 6b.” “Do not deduct attorney fees incidental to litigation incurred by the beneficiaries.”
Interest and penalties are handled separately. “Interest expenses incurred after the decedent’s death are generally allowed as a deduction if they are reasonable, necessary to the administration of the estate, and allowable under local law.” “Penalties on estate tax deficiencies are not deductible even if they are allowable under local law.” Other costs go on line 8: “Miscellaneous administration expenses necessarily incurred in preserving and distributing the estate are deductible on line 8.” “These expenses include appraiser’s and accountant’s fees, certain court costs, and costs of storing or maintaining assets of the estate.”
Schedule J: estate return or income tax return
An administration expense can be deducted in one place only. The instructions say “you cannot deduct expenses incurred in administering property subject to claims on both the estate tax return and the estate’s income tax return.” “If you choose to deduct them on the estate tax return, you cannot deduct them on a Form 1041”, filed for the estate. The income tax side is covered on the Form 1041 for estates page.
Schedule L: net losses during administration
The loss section begins: “You may deduct only those losses from thefts, fires, storms, shipwrecks, or other casualties that occurred during the settlement of the estate in Part I.” “Deduct only the amount not reimbursed by insurance or otherwise.” “Describe in detail the loss sustained and the cause.” Two exclusions are stated: “Do not deduct losses claimed as a deduction on a federal income tax return or depreciation in the value of securities or other property.”
Schedule L: expenses for property not subject to claims
“You may deduct expenses incurred in administering property that is included in the gross estate but that is not subject to claims in Part II.” “Only deduct these expenses if they were paid before the section 6501 period of limitations for assessment expired.” The instructions say what these usually are: “The expenses deductible on this schedule are usually expenses incurred in the administration of a trust established by the decedent before death.”
“List the names and addresses of the persons to whom each expense was payable and the nature of the expense.” “Keep all vouchers and receipts for inspection by the IRS.”
Where the number comes from
The numbers come from the bills, receipts, fee agreements and court orders for each item. The instructions tie each entry to a record: names and addresses of who is paid, the nature of the expense, and, for Schedule L, “indicating the schedule, line number, and item number where the property is included in the gross estate”. Keep the paperwork with the return file.
Where it goes next
The Part V recap captions the Schedule J total as “Total funeral expenses and expenses incurred in administering property subject to claims. Schedule J, line 12”. The Schedule L totals are “Total net losses during administration. Schedule L, line 4” and “Total expenses incurred in administering property not subject to claims. Schedule L, line 8”. Part V ends with “Tentative total allowable deductions. Add items 18 through 23. Enter here and on Part II, line 2”. See Form 706 Parts IV and V and Form 706 Part II lines 1 to 8 for how those totals are used. Compare Schedule M and Schedule O for the other deductions in the same recap.
Edition and line numbers
This page reads the Form 706 revision dated August 2025 and the Instructions for Form 706 revision dated July 2026. They are the current files irs.gov served on 2026-10-18, byte-identical to the copies this page was checked against. The form says “To be filed for decedents dying after December 31, 2024.” The instructions state “For decedents dying after December 31, 2025.” The instructions also explain how the schedules are packaged: “The schedules should be completed and attached to Form 706, as necessary.” Check the revision date printed on your Form 706 and the instruction edition for the year of death, and use the line numbers on that revision.
Common mistakes
- Putting an expense on the wrong schedule. The instructions say “Do not list expenses incurred in administering property not subject to claims on this schedule.” Those go on Schedule L.
- Deducting the same administration expense on the estate tax return and on the estate’s income tax return. The rule is “you cannot deduct expenses incurred in administering property subject to claims on both the estate tax return and the estate’s income tax return.”
- Deducting commissions that will not be collected. The instructions say “Do not deduct commissions if none will be collected.”
Related: Form 706, funeral costs and the estate, Form 1041 for estates, and estate planning glossary.
Sources
- Instructions for Form 706 (Rev. July 2026): https://www.irs.gov/pub/irs-pdf/i706.pdf
- Form 706 (Rev. August 2025), United States Estate (and Generation-Skipping Transfer) Tax Return: https://www.irs.gov/pub/irs-pdf/f706.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.