Adell Estate's Computation of Deferred Tax vs. the IRS Computation

Hypothetical Estate Tax Section 6166 Computations

Estate of Franklin Z. Adell v. Commissioner
United States Tax Court
TC Memo 2013-228 (September 30, 2013 - Adell 1);
TC Memo 2014-89 (May 15, 2014 - Adell 2); and
TC Memo 2014-155 (August 04, 2014 - Adell 3)

Comparison of the §6166 Deferred Tax Figures as Determined by the Estate
and by the IRS - Form 706 as Filed

 

Hypothetical Figures Reported by the Adell Estate on Form 706
(Extrapolated From the Tax Court Opinions)
37,806,793.12 Gross estate
3,250,886.60 Total deductions - Schedules J, K, and L 
34,555,906.52 Taxable estate (and §6166(b)(6) adjusted gross estate)
818,567.00 Adjusted taxable gifts 
34,374,473.52 Total taxable amount
16,133,058.00 Tentative tax 
63,741.00 Total gift tax paid or payable 
16,069,317.00 Gross estate tax 
780,800.00 Allowable unified credit
15,288,517.00 Net estate tax (Tax Court)
8,094,557.00 Tax paid with the Form 4768 filing (Adell 1, Adell 3)
7,193,960.00 Balance of tax due (Tax Court)

 

Estate's Computation of the Tax Deferred Under §6166
16,260,166.00 Closely held business value (Tax Court)
34,555,906.52 §6166(b)(6) adjusted gross estate
47.054664880517600%

§6166(a)(2) ratio  - closely held value divided by the §6166(b)(6) adjusted gross estate (the estate did not limit the number of decimal places to 6)
15,288,517.00 Net estate tax (Tax Court)
47.054664880517600% Times the §6166(a)(2) ratio, yields 
7,193,960.44 Tax deferred under §6166 per the Estate (Adell 1)

 

IRS Computation of Tax Deferred Under §6166
16,260,166.00 Closely held business value (Tax Court)
34,555,906.52 §6166(b)(6) adjusted gross estate
47.0547%

§6166(a)(2) ratio  - closely held value divided by the §6166(b)(6) adjusted gross estate (limited to 6 decimal places per IRM Exhibits 4.25.2-1 and 4.25.2-2 (2018 IRM)
15,288,517.00 Net estate tax (Tax Court)
47.0547% Times the §6166(a)(2) ratio, yields 
7,193,965.81 Tax deferred under §6166 per IRS (Adell 1)