What is a Section 6166?

Section 6166 allows estate taxes to be deferred if the interest in a closely held business exceeds 35% of the decedent’s gross estate and the business qualifies as an active trade or business.

How do you qualify for a special use valuation?

What are the Requirements for Special Use Valuation?

The net value of the property owned by the small business must be a minimum of 50% of the gross estate of the decedent, or individual who passed away;
The net value of real estate must be a minimum of 25% of the adjusted gross estate of the decedent;

Is interest paid on estate tax deductible?

The only costs you can deduct are state and local real estate taxes actually paid to the taxing authority and interest that qualifies as home mortgage interest, and mortgage insurance premiums.

What is the due date of a federal estate tax return Form 706 for a taxpayer who died on May 15 Year 2 assuming that a request for an extension of time is not filed?

What is the due date of a federal estate tax return (Form 706), for a taxpayer who died on May 15, Year 2, assuming that a request for an extension of time is not filed? Choice “d” is correct. Unless an extension is filed, Form 706 is due exactly nine months after the decedent’s death, which is February 15, Year 3.

What is a 6166 election?

An estate qualifies for a section 6166 election if the value of the decedent’s interest in the closely held business exceeds 35 percent of the adjusted gross estate, the decedent was a United States citizen or resident at the time of his or her death, and the estate made the election by attaching a full and complete …

Can the estate tax be paid in installment?

In case the available cash of the estate is insufficient to pay the total estate tax due, payment by installment shall be allowed within two (2) years from the statutory date for its payment without civil penalty and interest upon approved by the concerned BIR Official.

Under what section does the special valuation apply to?

Section 2032A Special
Passed in 1976, Section 2032A Special Use Valuation is a tool to help farm and ranch families preserve their businesses by allowing family business owners to manage their estate tax liability.