- 8 -
Decedent's estate's Federal estate tax return reported a
taxable estate of $12,406,660 including $5,515,327 of gift taxes
paid on gifts made within 3 years of decedent's date of death.
Because decedent's estate's obligations were greater than the
amount of property disclaimed by decedent's surviving spouse, the
parties agree that, according to article IV of decedent's will,
at least a portion of the class B shares would have to be sold to
meet decedent's estate's obligations.
Decedent's estate was entitled to make, but did not make, an
installment payment election of the Federal estate tax under
section 6166, and approximately 40 percent of decedent’s estate's
Federal estate tax liability could have been deferred. On the
due date for payment of decedent’s estate's Federal estate tax,
the statutory interest rate applicable for section 6166 deferred
payments was 11 percent. Because decedent's estate qualified for
section 6166, the provisions of article VII of the class B stock
buy-sell agreement and the voting stock agreement in effect at
decedent's death applied to decedent's estate to the extent that
decedent's class B and class E shares did not pass to "permitted
transferees" under article III of the respective stock
restriction agreements.
Under the terms of each of the two agreements in effect at
decedent's death, an executor of a deceased shareholder to which
article VII applied had two choices: First, the executor could
elect under section 6166 to pay Federal estate tax in
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011