The interest is deductible if you pay it with the filing of the 706. The calculation is a circular one for the inclusion of the interest on the 706 reduces the tax due, and therefore the interest that is due. I used a program I had and approximated the amount of interest and had the trustee pay the interest with the filing of the estate tax return.

Since I had a large estate, I wanted to take the deduciton currently and did an estimate. The IRS will send a follow up calcuation and there may be more due interest due. If the amount is material I'll file a revised 706.

If you wait for the IRS to compute the interest, you will file a revised 706 taking the interest as an adminsitration expense, recomputing the tax due and filing for a refund.

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The current interst rate is determined quarterly and is the underpayment and overpayment rate of noncorporate taxpayers as determined by Section 6621. See Revenue Ruling 2005-15 which contains a table of historical rates since 1975.