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$3,038,000 of which had been paid. The executors elected to pay
$1 million of these expenses from income by executing Form 4421,
Declaration--Executor's Commissions and Attorney’s Fees.
2. The Executors’ Decision To Pay the Estate Tax in Full
During the examination of this case, which began in 2001,
the Internal Revenue Service (IRS) examiner told the tax counsel
for the estate that, because the estate had transferred assets to
HG, the estate’s ability to continue to defer estate tax under
section 6166 was doubtful, and acceleration of payment of all
estate tax under section 6166(g) would likely result.
In January and February 2002, the executors obtained written
opinions from tax attorneys recommending that the estate pay its
estate tax in full to avoid the risks of acceleration under
section 6166(g). The executors decided to follow that advice.
3. Farm Credit Loan
The executors estimated that the estate needed $38 million
to pay: (a) $9,797,400 for Federal estate tax and interest; (b)
$2,915,900 for New York State estate tax and interest; (c)
$19,470,525 for compensation for Bergreen; (d) $5 million for
compensation for Davis; and (5) $816,175 for other miscellaneous
administration expenses.
On October 18, 2002, Bergreen and Moody, acting as
executors, borrowed $38 million from Farm Credit Bank of North
Florida, CA (Farm Credit loan). The loan was secured by a
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