Cory

Executor John Coudures has appealed from an order affirming the report of the inheritance tax referee. Affirmed.

Coudures, as executor of the will of his mother, Marie Coudures, elected to pay the federal estate tax pursuant to section 6166 of the Internal Revenue Code. Section 6166 allows installment payments on the portion of the estate tax attributable to interests in farming and closely held businesses. At the time of these proceedings Revenue and Taxation Code section 14105 (repealed June 8, 1982, by Stats. 1982, ch. 1535, § 14, p. 5974) allowed a similar deferment of state inheritance taxes. However, a section 14105 election was not made in this case.

The total estate tax was determined to be $954,592.93. The Department of the Treasury determined the amount deferred under Internal Revenue Code section 6166a to be $824,611.24. Annual interest payments on this amount commenced on March 7, 1980 and continue until March 7, 1984. At that time, the annual instalments, together with accrued interest, become due.

The report of the inheritance tax referee for the state did not allow the interest paid on the estate tax as a deduction in determining the clear market value…