Cal. Code Regs. tit. 18 § 13983.2
Ordinarily, only one-half of the amount of the unpaid portion of a joint and several obligation of the decedent and another person is allowable as a deduction in the decedent's estate, where the decedent and such other person received equal benefits from the consideration received for the obligation.
If in fact the decedent was the principal obligor of a joint and several obligation entered into between himself and another, the latter being a mere surety on the obligation, the entire amount of the unpaid portion of the obligation is allowable as a deduction. On the other hand, if the decedent was the surety and the other person the principal obligor, no part of the obligation is ordinarily allowable.
NOTE: Reference: Section 13983, Revenue and Taxation Code.
Cal. Code Regs. Tit. 18, § 13983.2