Robert E. Roeder
Nebraska Attorney General Opinions
State of Nebraska office of the Attorney General
January 17, 1985
Date: January 15, 1985
Paul L. Douglas, Attorney General
Patrick T. O'Brien, Deputy Attorney General
John R. Thompson, Deputy Attorney General
SUBJECT: Computation of Inheritance Tax When Payment of Federal Estate Tax is Deferred Under the Provisions of the Internal Revenue Code
REQUESTED BY: Robert E. Roeder, Logan County Attorney North Platte, Nebraska
OPINION By: A. Eugene Crump, Deputy Attorney General, Charles E. Lowe, Assistant Attorney General.
QUESTION: 1. When the amount of federal estate tax on an estate is decreased due to interest expense incurred pursuant to an election under §6166 of the Internal Revenue Code to pay the tax in installments, must the amount deducted for federal estate tax for inheritance tax purposes under, Neb. Rev. Stat. §77-2018.04(5) (Reissue 1981) be likewise reduced to reflect the lower amount of federal estate tax paid?
CONCLUSION: I. Yes.
QUESTION: 2. Is the interest expense incurred pursuant to such an election under §6166 of the Internal Revenue Code deductible for inheritance tax purposes under Neb. Rev. Stat. § 77-2018.04(2)
CONCLUSION: 2. Yes, but only to the extent such interest is actually accrued.
1. Subsection 77-2018.04(5) provides:
In all proceedings for the determination of inheritance tax, the following deductions from the value of the property subject to Nebraska inheritance taxation shall be allowed to the extent paid from, chargeable to, or paid with respect to property subject to Nebraska inheritance taxation:
. . . .
(5) Any federal estate tax paid, after deduction of all applicable credits, which is attributable to property subject to Nebraska inheritance taxation.
We are of the opinion that subsection 77-2018.04(5) means just what it says; i.e., that only federal estate taxes actually paid may be deducted from the value of the property subject to Nebraska's inheritance tax. If any estate, through various provisions of the federal estate tax law, is able to and, in fact, does pay a lesser amount of federal estate tax than might otherwise be the case, only that lesser amount may be deducted. To do otherwise would result in deduction of theoretical amounts of federal estate tax which might never be paid by...