Estate of Krantz

• Decision Date: 31 October 1977
• Citation: 398 N.Y.S.2d 986,91 Misc.2d 1016
• Parties: ESTATE of Abraham KRANTZ, Deceased. Surrogate's Court, Bronx County
• Court: New York Surrogate Court

Page 986

398 N.Y.S.2d 986

91 Misc.2d 1016

ESTATE of Abraham KRANTZ, Deceased.

Surrogate's Court, Bronx County.

Oct. 31, 1977.

Leight, Drimmer, Weinstein & Gershuny, New York City (Leonard Leight, New York City, of counsel), for petitioner-co-executor.

Frank J. Giordano, New York City, for State Tax Comn.

BERTRAM R. GELFAND, Surrogate.

This application by one of the co-executors to reduce the rate of interest upon unpaid estate taxes from 10% per annum to 6% per annum from the date of decedent's death is opposed by the State Tax Commission.

Decedent died on February 12, 1974. Letters testamentary were issued on April 2, 1974. The first payment on account of New York Estate taxes was made on August 20, 1974 in the sum of $9,000. and the second payment in the sum of $8,479.74 was paid on an unspecified date in August, 1977. The petition to fix New York State estate taxes was filed with the court on June 2, 1977 and on June 30, 1977 an order was signed fixing the tax in the sum of $17,479.74 based upon a gross estate in the sum of $572,882.31.

The United States Estate Tax return was timely filed on November 5, 1974. The State Tax Commission does not dispute petitioner's contention that the $9,000. paid in August, 1974 would have covered in full the estate taxes due to New York if the valuation set forth by the taxpayer on the Federal return had been accepted. However, this return was audited which resulted in I.R.S. notifying the estate by a letter dated December 22, 1976 that it had determined that the total gross estate should be in the sum of $1,118,944. instead of the sum of $382,419. as reported on the tax return by the petitioner. I.R.S. reached this determination by increasing the value of decedent's interest in twelve corporations whose principal assets were real estate by approximately $686,000., thus making the total of Schedule "B" of the return $967,453.74 instead of the $281,186. reported by the estate; by increasing Schedule "C" of the return by the sum of $257.26 for the failure to adjust the balance in a bank account to the date of decedent's death, and by increasing Schedule "F" of the return by $50,000. for the failure to list therein as an asset a $50,000. loan that the decedent had made to one of the real estate corporations in which he had an interest.

After a conference, I.R.S. notified the estate by a letter dated April 22, 1977 that it would accept approximately $422,000. as the correct total value of Schedule "B" instead of the $967,000. it had originally determined should be the total of that schedule. It appears that I.R.S. adhered to its original position as to the amount that Schedules "C" and "F" of the return should be increased and the estate did not take issue with this determination.

Under Tax Law § 249-z(1)(f) if the estate...