Annual Installment Example 1 | |
| Feb-17-2016 | Date of death |
| Nov-17-2016 | Estate tax return due date. The return is filed with a regular section 6166(a) 14-year election. Non-deferred tax of $2,805,379.17 is paid with the return filing. |
| There is a charitable bequest of $2,000,000. | |
Annual Installment Computation - Example 1 §6166(b)(6) Adjusted Gross Estate Computation | ||||||
|---|---|---|---|---|---|---|
| Gross estate | 50,000,000.00 | |||||
| Schedule J - | ||||||
| A. | Funeral expenses | 25,000.00 | ||||
| B. | 1. | Executors' commissions | 1,000,000.00 | |||
| 2. | Attorney fees | 1,400,000.00 | ||||
| 3. | Accountant fees | 415,000.00 | ||||
| 4. | Miscellaneous | |||||
| a. | Appraisals | 250,000.00 | ||||
| b. | Utilities | 14,375.00 | ||||
| c. | Other | 1,215.00 | ||||
| Total Schedule J | 3,105,590.00 | |||||
| Schedule K - Debts | ||||||
| Debts of decedent | 144,535.00 | |||||
| Schedule K - Mortgages and Liens | ||||||
| Mortgages | 876,550.00 | |||||
| Total Schedule K | 1,021,085.00 | |||||
| Total Schedules J and K debts and expenses | 4,126,675.00 | |||||
| Allowable amount of deductions | 4,126,675.00 | |||||
| Schedule L - Net Losses | 0.00 | |||||
| Schedule L - Expenses on property not subject to claims | 0.00 | |||||
| Total Schedules J, K, and L debts and expenses | 4,126,675.00 | 4,126,675.00 | ||||
| Section 6166(b)(6) adjusted gross estate | 45,873,325.00 | |||||
Annual Installment Computation - Example 1 §6166(a)(2) Ratio Computation | ||||
| Section 6166 business value, divided by | 37,500,000.00 | |||
| Section 6166(b)(6) adjusted gross estate, yields | 45,873,325.00 | |||
| Section 6166(a)(2) ratio for the maximum amount of tax which may be paid in installments | 0.817469 | |||
Annual Installment Computation - Example 1 Estate Tax Computation | ||||||
|---|---|---|---|---|---|---|
| 1 | Gross estate | 50,000,000.00 | ||||
| Schedules J, K, and L deductions | 4,126,675.00 | |||||
| Marital deduction | 0.00 | |||||
| Charitable deduction | 2,000,000.00 | |||||
| 2 | Total allowable deductions | 6,126,675.00 | ||||
| 3a | Tentative taxable estate | 43,873,325.00 | ||||
| 3b | State death tax deduction | 0.00 | ||||
| 3c | Taxable estate | 43,873,325.00 | ||||
| 4 | Adjusted taxable gifts | 0.00 | ||||
| 5 | Add lines 3c and 4 | 43,873,325.00 | ||||
| 6 | Tentative tax on the line 5 amount | 17,495,130.00 | ||||
| 7 | Total gift tax paid or payable | 0.00 | ||||
| 8 | Gross estate tax | 17,495,130.00 | ||||
| 9a | Basic exclusion amount | 5,450,000.00 | ||||
| 9b | DSUE amount | 0.00 | ||||
| 9c | Applicable exclusion amount | 5,450,000.00 | ||||
| 9d | Applicable credit amount | 2,125,800.00 | ||||
| 10 | Adjustment to applicable credit amount | 0.00 | ||||
| 11 | Allowable applicable credit amount | 2,125,800.00 | ||||
| 12 | Subtract line 11 from line 8 | 15,369,330.00 | ||||
| 13 | Credit for foreign death taxes | 0.00 | ||||
| 14 | Credit for tax on prior transfers | 0.00 | ||||
| 15 | Total credits | 0.00 | ||||
| 16 | Net estate tax | 15,369,330.00 | ||||
| 17 | Generation-Skipping taxes payable | 0.00 | ||||
| 18 | Total transfer taxes | 15,369,330.00 | ||||
Annual Installment Computation - Example 1 §6166(a) Annual Installment | |
| Net estate tax (equal to total transfer taxes in this example) | 15,369,330.00 |
| Section 6166(a)(2) ratio expressed as a percentage | 81.7469% |
| Maximum amount of tax which may be paid in installments under §6166 | 12,563,950.83 |
| Number of installments selected | 10 |
| The annual installment, the first of which is due Nov-17-2021 | 1,256,395.08 |