Section 6166(b)(5) Overview

Section 6166(b)(5) provides:

(5) Closely held business amount

For purposes of this section, the term "closely held business amount" means the value of the interest in a closely held business which qualifies under subsection (a)(1).

6166(b)(5) Comment 1:  Section 6166(a)(1) provides "[i]f the value of an interest in a closely held business which is included in determining the gross estate of a decedent who was (at the date of his death) a citizen or resident of the United States exceeds 35 percent of the adjusted gross estate, the executor may elect to pay part or all of the tax imposed by section 2001 in 2 or more (but not exceeding 10) equal installments."
6166(b)(5) Comment 2:  An "interest in a closely held business" is defined in §6166(b)(1) as an interest in a sole proprietorship, or as an interest as a partner in a partnership, or as stock in a corporation, which is carrying on a trade or business if the parameters within §6166(b)(1) are satisfied.
6166(b)(5) Comment 3:  The "value" of an interest in a closely held business is defined in §6166(b)(4) as the value determined for estate tax purposes.
6166(b)(5) Comment 4:  Section 6166(a)(2) provides that the ratio for calculating the maximum amount of tax imposed by §2001 which may be paid in installments is determined by dividing the "closely held business amount" by the amount of the adjusted gross estate.
6166(b)(5) Comment 5:  Section 6166(b)(6) defines the "adjusted gross estate" as the gross estate minus the sum of the allowable deductions determined under sections 2053 and 2054. By definition, this excludes the state death tax deduction allowable under §2058.
6166(b)(5) Comment 6:  Section 6166(b)(9)(A) provides that for purposes of §6166(a)(1) and determining the closely held business amount, "the value of any interest in a closely held business shall not include that portion of such interest which is attributable to passive assets held by the business."