Form Et-415 - Application For Deferred Payment Of Estate Tax Page 2


Page 2 of 3 ET-415 (3/14)
If the decedent had interests in two or more qualifying closely held
closely held business (see Exceptions below). For dates of death
businesses, they will be treated as an interest in one business for
on or after January 1, 1998, the reduced rate of interest is 2%.
calculation purposes.
The deferred tax that exceeds $54,000 is not eligible for a reduced
Along with Form ET-415, the estate must submit a statement
rate of interest, and the prevailing rate of interest is charged.
identifying which properties reported on the estate tax return
Exceptions to the amount eligible for a deferral, due date for
constitute the closely held business, and stating all facts forming
payment of tax, and reduced rate of interest:
the basis that the estate qualifies for the deferred payment of the
1. In the case of a deficiency, only the amount of tax attributable to
estate tax.
the closely held business is eligible for deferral.
Attach the completed Form ET-415 and supporting documents to:
2. If the executor makes the election provided in IRC
Form ET-706. If you fail to attach Form ET-415, mail it, together
section 6166(b)(8) to treat holding company stock owned
with any supporting documents, to the mailing address shown in
by the decedent as business company stock to meet the
Form ET-706-I.
35% requirement, the 5-year deferral for payment of the tax, and
the 2% interest rate, both mentioned above, will not apply. In this
Election to defer payment of the estate tax attributable
case, the first installment payment of tax would be due on the
to a closely held business – The executor may elect to pay
date that is nine months after the date of death.
that portion of the New York State estate tax attributable to the
decedent’s interest in a closely held business in annual installments
of not less than two, and not more than ten, equal payments.
Line instructions
Line 1 – Enter the market value or special use value of the
The estate is required to promptly pay the non-deferred portion of
decedent’s interest in the closely held business. If the estate
the New York State estate tax and applicable accrued penalty and
elected to use the alternate valuation date, use the appropriate
interest, unless it has been granted an extension of time to pay that
value as of that date.
portion of the tax. The deferred payment plan will be cancelled if the
non-deferred portion and any applicable penalty and interest are
Line 2 – Federal adjusted gross estate – The federal adjusted
not paid on time.
gross estate is the amount reported on page 3, Schedule A,
Qualifications – All of the following conditions must be met:
line 22, of Form ET-706 used for dates of death on or before
March 31, 2014, reduced by the deductions allowable under IRC
1. The decedent’s interest in a closely held business must be more
sections 2053 or 2054 (the total of the amounts reported on federal
than 35% of the federal adjusted gross estate (see instructions
Form 706 Part 5, lines 18, 19, and 20).
for line 2, below).
Line 3 – Percentage ratio – Test 1 – Divide line 1 by line 2. If the
2. The 35% requirement must also be met by computing the
result is greater than 35%, enter the result on line 3 and round the
percentage ratio by adding the value of any gifts made
result to the fourth decimal place. Continue with Test 2, below. If the
by the decedent within three years of death to the federal
result is 35% or less, the estate fails to qualify and should not file
adjusted gross estate based on Internal Revenue Code (IRC)
this form.
section 2035(c)(2).
3. If the estate is required to file a federal estate tax return, the
Test 2 – If the decedent made any gifts within three years prior
estate must make the election for the federal estate tax.
to death, add to the amount on line 2, the value of those gifts. If
any of those gifts were interests in the closely held business, add
Time limit for making the election – The election must be made
to the amount on line 1 the value of those gifts. Divide line 1 by
within nine months after the date of death, or fifteen months after
line 2. If the result is greater than 35%, the estate qualifies. Use the
the date of death when the estate has been granted an extension
percentage shown on line 3 from Test 1. If the result is 35% or less,
of time to file the estate tax return. (See Form ET-133, Application
the estate does not qualify and should not file this form.
for Extension of Time to File and/or Pay Estate Tax.)
Line 5 – Maximum amount that could be deferred – This
For a deficiency, the election to pay the amount of tax attributable
represents the portion of the net estate tax attributable to the value
to the closely held business in installments must be made within
of the closely held business.
60 days after the issuance of a notice and demand for payment.
Line 6 – Amount elected for installment payments – Enter
Due dates for payment of tax and payment of interest – Unless
that part of the amount on line 5 that the estate elects to pay in
an earlier date is elected, the first installment of tax is due on the
date that is five years and nine months after the date of death.
Accrued interest on the deferred tax is paid annually, with the first
For a deficiency – If the estate previously elected to defer the tax
payment due on the date that is one year and nine months after the
attributable to a closely held business, the amount of tax eligible for
date of death (see Exceptions, below).
deferral is limited to the maximum amount of tax the estate could
have deferred based on a return reflecting the adjustments that
Acceleration of payments – If the estate fails to make payments
resulted in the deficiency and reduced by the amount previously
of tax or interest within 6 months of the due date, the Tax
elected to be paid in installments. This amount is prorated to the
Department may terminate the right to make installment payments
installments previously elected. The part of the deficiency prorated
and force an acceleration of payment of the tax upon notice and
to future installments is paid with that installment. The part of the
deficiency prorated to an installment already paid or currently due is
paid with this application.
Generally, if any portion of the interest in the closely held business
which qualifies for installment payments is distributed, sold,
If the executor did not elect to pay the tax on the closely held
exchanged, or otherwise disposed of, or money and other property
business in installments, he or she has 60 days after the issuance
attributable to such an interest is withdrawn, and the aggregate of
of a notice and demand to make an election to pay the deficiency in
these events equals or exceeds 50% of the value of the interest,
installments. If a federal estate tax return is required, the executor
then the right to make installment payments will be terminated, and
must also elect to pay the federal deficiency in installments.
the unpaid portion of the tax will be due upon notice and demand.
Line 7 – Amount of annual installment of tax – Divide the
Interest rates on the deferred tax – Interest accrues on the
amount on line 6 by the number of annual installments elected (that
deferred tax from the date that is nine months after the date of
is, two or more equal annual installments, not to exceed 10).
death. However, a reduced rate of interest is imposed on the lesser
of $54,000, or the tax attributable to the decedent’s interest in a


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