- 15 -
Respondent responds that estates holding loan interests
would not have the same difficulties paying estate taxes as would
estates holding only equity interests in family businesses
because loan interests can be sold to unrelated investors to
obtain cash without affecting the ownership structure of the
family-owned business.
The parties refer to section 6166, an estate tax provision
somewhat related to section 2057, and petitioners argue that the
language thereof illustrates how Congress could have limited
section 2057 had it intended to do so. Section 6166 provides for
a deferral of the payment of Federal estate taxes where the
decedent’s interest in a closely held business exceeds 35 percent
of the adjusted gross estate. For purposes of section
6166(b)(1), the statute expressly limits “interest in” a closely
held business to an equity or ownership interest by using the
terms “interest as a proprietor”, “interest as a partner”, and
“stock”. The relevant language of section 6166(b)(1) provides as
follows:
SEC. 6166. EXTENSION OF TIME FOR PAYMENT OF ESTATE TAX
WHERE ESTATE CONSISTS LARGELY OF INTEREST IN
CLOSELY HELD BUSINESS.
(b) Definitions and Special Rules.--
(1) Interests in closely held business.--For
purposes of this section, the term “interest in a
closely held business” means--
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: March 27, 2008