Form Et-415 - Application For Deferred Payment Of Estate Tax (Page 2 of 3) in pdf

Page 2 of 3 ET-415 (2/11)

Instructions

(continued)

Interest rates on the deferred tax — Interest accrues on the

deferred tax from the date that is nine months after the date of

If the decedent had interests in two or more qualifying closely held

death. However, a reduced rate of interest is imposed on the lesser

businesses, they will be treated as an interest in one business for

of $54,000, or the tax attributable to the decedent’s interest in a

calculation purposes.

closely held business (see Exceptions below). For dates of death on

or after January 1, 1998, the reduced rate of interest is 2%.

Along with Form ET-415, the estate must submit a statement

identifying which properties reported on the estate tax return

The deferred tax that exceeds $54,000 is not eligible for a reduced

constitute the closely held business, and stating all facts forming the

rate of interest, and the prevailing rate of interest is charged.

basis that the estate qualifies for the deferred payment of the estate

tax.

Exceptions to the amount eligible for a deferral, due date for

payment of tax, and reduced rate of interest:

Attach the completed Form ET-415 and supporting documents

1. In the case of a deficiency, only the amount of tax attributable to

to the appropriate form: Form ET-706, Form ET-115, or

the closely held business is eligible for deferral.

Form ET-115.1. If you fail to attach Form ET-415, mail it, together

2. If the executor makes the election provided in IRC

with any supporting documents, to the mailing address shown on

Form ET-706, Form ET-115, or Form ET-115.1.

section 6166(b)(8) to treat holding company stock owned

by the decedent as business company stock to meet the

Election to defer payment of the estate tax attributable to

35% requirement, the 5-year deferral for payment of the tax, and

a closely held business — The executor may elect to pay

the 2% interest rate, both mentioned above, will not apply. In this

that portion of the New York State estate tax attributable to the

case, the first installment payment of tax would be due on the

decedent’s interest in a closely held business in annual installments

date that is nine months after the date of death.

of not less than two, and not more than ten, equal payments.

Line instructions

The estate is required to promptly pay the non-deferred portion of

the New York State estate tax and applicable accrued penalty and

Line 1 – Enter the market value or special use value of the

interest, unless it has been granted an extension of time to pay that

decedent’s interest in the closely held business. If the estate elected

portion of the tax. The deferred payment plan will be cancelled if the

to use the alternate valuation date, use the appropriate value as of

non-deferred portion and any applicable penalty and interest are

that date.

not paid on time.

Line 2 – Federal adjusted gross estate — The federal adjusted

Qualifications — All of the following conditions must be met:

gross estate is the amount reported on page 3, Schedule A, line 22,

of Form ET-706, 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 17, 18, and 19).

for line 2, below).

2. The 35% requirement must also be met by computing the

For Form ET-115, the federal adjusted gross estate is the

percentage ratio by adding the value of any gifts made

amount on page 2, line 36, less the amount on line 38 (qualified

by the decedent within three years of death to the federal

conservation easement exclusion), and reduced by the deductions

adjusted gross estate based on Internal Revenue Code (IRC)

allowable under IRC sections 2053 and 2054. It is also the same

section 2035(c)(2).

amount used for the federal election.

3. If the estate is required to file a federal estate tax return, the

Line 3 – Percentage ratio – Test 1 — Divide line 1 by line 2. If the

estate must make the election for the federal estate tax.

result is greater than 35%, enter the result on line 3 and round the

result to the fourth decimal place. Continue with Test 2, below. If the

Time limit for making the election — The election must be made

result is 35% or less, the estate fails to qualify and should not file

within nine months after the date of death, or fifteen months after

this form.

the date of death when the estate has been granted an extension

of time to file the estate tax return. (See Form ET-133, Application

Test 2 — If the decedent made any gifts within three years prior

for Extension of Time to File and/or Pay 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

For a deficiency, the election to pay the amount of tax attributable

to the amount on line 1 the value of those gifts. Divide line 1 by

to the closely held business in installments must be made within

line 2. If the result is greater than 35%, the estate qualifies. Use the

60 days after the issuance of a notice and demand for payment.

percentage shown on line 3 from Test 1. If the result is 35% or less,

Due dates for payment of tax and payment of interest — Unless

the estate does not qualify and should not file this form.

an earlier date is elected, the first installment of tax is due on the

Line 5 – Maximum amount that could be deferred — This

date that is five years and nine months after the date of death.

represents the portion of the net estate tax attributable to the value

Accrued interest on the deferred tax is paid annually, with the first

of the closely held business.

payment due on the date that is one year and nine months after the

date of death (see Exceptions, below).

Line 6 – Amount elected for installment payments — Enter

that part of the amount on line 5 that the estate elects to pay in

Acceleration of payments — If the estate fails to make payments

installments.

of tax or interest within 6 months of the due date, the Tax

Department may terminate the right to make installment payments

For a deficiency — If the estate previously elected to defer the tax

and force an acceleration of payment of the tax upon notice and

attributable to a closely held business, the amount of tax eligible for

demand.

deferral is limited to the maximum amount of tax the estate could

have deferred based on a return reflecting the adjustments that

Generally, if any portion of the interest in the closely held business

resulted in the deficiency and reduced by the amount previously

which qualifies for installment payments is distributed, sold,

elected to be paid in installments. This amount is prorated to the

exchanged, or otherwise disposed of, or money and other property

installments previously elected. The part of the deficiency prorated

attributable to such an interest is withdrawn, and the aggregate of

to future installments is paid with that installment. The part of the

these events equals or exceeds 50% of the value of the interest,

deficiency prorated to an installment already paid or currently due is

then the right to make installment payments will be terminated, and

paid with this application.

the unpaid portion of the tax will be due upon notice and demand.

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

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