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2003. Respondent contends that the Farm Credit loan was
unnecessary because the estate could have paid the annual
installments of estate taxes from the proceeds of the sale of
estate assets or from the interest or principal on the $143
million in notes, due on January 31, 2004, without borrowing
funds from Farm Credit.
We disagree. After the executors elected to pay the estate
tax in 10 annual installments, respondent’s examiner told the
estate’s counsel that the estate’s transfer of corporate assets
to HG and its subsidiaries threatened the estate’s ability to
continue to defer payment of estate tax under section 6166, thus
making acceleration of estate tax under section 6166(g) likely.
Subsequently, on the advice of estate tax counsel, the executors
decided to pay the estate tax in full. Thus, we disregard the
fact that the estate had elected to pay the estate tax in 10
annual installments in deciding whether the Farm Credit loan was
necessary.
7. Whether, Under New York Law, the Executors Were
Required To Have the Foundation Return Assets to the
Estate To Pay Estate Tax
Respondent contends that the loan was unnecessary because
the executors were required, under New York law, to demand that
the foundation return to the estate the amount of assets needed
to pay estate taxes and administration expenses.
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