Forbes.com reports that Brooke Astor’s multi-million dollar estate is now facing an extensive tax bill from the Internal Revenue Service. The estate has recently filed multiple lawsuits in the United States Tax Court. The lawsuits challenge the IRS’s demand that the executors of the Astor estate pay another $62 million in fees.
There is some discrepancy between the IRS and the estate about the total value of Astor’s estate. The IRS claims that the estate is worth some $223 million and the federal government is entitled to $97 million in federal estate taxes. The Astor estate, on the other hand, claims that the estate is only worth $93 million and that the federal government is thus only entitled to $35 million in taxes and fees. Neither of these claims matches the $131 million estimate published in the New York Times that the public heard right before Mrs. Astor’s death.
The IRS included in the value of the estate gifts worth about $20 million that Mrs. Astor gave away. The estate acknowledged that federal gift tax returns were not filed and the IRS has assessed $2 million in penalties for the estate’s failure to file the returns. The estate also claims that $96 million comes from charitable bequests that should be deducted, but the IRS refuses to allow those to be used to reduce the amount of the tax debt because the IRS cannot be certain about those charitable bequests.
Astor’s estate is still in the process of liquidation. Her apartment just recently sold for $21 million and her jewelry and art are expected to bring in about $5 million at auction. Brooke Astor acquired her enormous fortune when her husband, Vincent Astor died and left her his entire fortune. Vincent Astor was the son of the famous John Jacob Astor IV who died on the Titanic’s famous maiden voyage. At the time of his death, John Jacob Astor left his son Vincent an estate worth an inflation adjusted $1.7 billion.
If you require the assistance of a Huntsvile estate planning attorney to keep you from falling in the same trap as the Astor estate, the estate planning lawyers at Martinson & Beason are here to assist you. Please call toll free at 1-800-255-6534 with any estate planning questions.
Source: “Brooke Astor’s Estate Now Faces $62 Million Attack by IRS,” by William P. Barrett, published at Forbes.com.