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

 

Estate's Computation of the Tax Deferred Under §6166
16,260,166.00Closely 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)
15,288,517.00Net estate tax (Tax Court)
47.054664880517600%Times the §6166(a)(2) ratio, yields 
7,193,960.44Tax deferred under §6166 per the Estate (Adell 1)

 

IRS Computation of Tax Deferred Under §6166
16,260,166.00Closely 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)
15,288,517.00Net estate tax (Tax Court)
47.0547%Times the §6166(a)(2) ratio, yields 
7,193,965.81Tax deferred under §6166 per IRS (Adell 1)