For income tax purposes, you cannot deduct funeral and burial expenses. If the decedent’s estate was large enough to be subject to federal estate tax, then these costs are deductible on the estate tax return, Form 706. The threshold for filing a federal estate tax return is $11.4 million for a decedent dying in 2019 and $11.58 million for a decedent dying in 2020.
Rules limiting loss deductions to cash investments and personal liability notes. An exception for real estate treats certain nonrecourse commercial loans as amounts “at risk.”