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Assurance Co. in the amount of $5,522,000, with an interest rate
of 9.69 percent per annum (Provident Loan). The executors
pledged decedent's class B shares to secure the Provident Loan.
On October 3, 1990, respondent received the estate's timely
filed return. Decedent's estate claimed a deduction of
$289,079.77 for interest, accrued or paid though September 26,
1990, on the First Company Loan and the Provident Loan. On
October 3, 1991, respondent also received a Form 843, Claim for
Refund and Request for Abatement, in which decedent's estate
claimed a refund for overpayment of estate tax resulting from
administration expenses of $462,251.22, for interest expenses
accrued or paid on the Provident Loan from September 26, 1990,
though September 30, 1991.
On January 15, 1991, decedent's estate received, in
redemption of 24,100 class B shares, $1,590,600 in cash from the
Company, which was used to pay principal and interest due on the
Provident Loan on January 15, 1991, and income taxes arising out
of the redemption of the class B shares.
On September 16, 1991, decedent's estate borrowed $75,000
from the Company pursuant to a line of credit note (Second
Company Loan). Thereafter, decedent's estate repaid the Second
Company Loan together with accrued interest of $1,533.89.
On December 30, 1991, the Company redeemed 69,994 shares of
class B stock from decedent's estate, paying approximately
$762,000 in cash and delivering a note in the amount of
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