News Letter 8

Continued Improvement in Version 2.00.

The current release of Inter-Est 2.00 is Release 14. Inter-Est 2.00 is now more stable and needs somewhat less memory than earlier versions. If you are using a release of Inter-Est 2.00 prior to Release 08, and are having memory problems, call us and we will give you a free update.

We have put off making major additions or changes to Inter-Est while we have worked to make it more stable and to complete the companion program RAR.

Inter-Est needs enough memory to create its output buffer in the lower 640K of memory. You should run mem or chkdsk to see how much free memory you have available for programs. You should have at least 530K. More is better, less could be a problem.

Please contact us when you have a computation problem. We cannot improve Inter-Est if we don’t know what the problems are.

Computation of Residue

Rev. Rul. 98-48 indicated that the IRS would no longer reduce the marital or charitable deduction by post death interest just because it was payable out of the marital or charitable bequest.

Last year, we adjusted our basic residue computation so that it no longer reduces the residue by the interrelated interest computed by the program.

We have had more calls than we should from users who were not familiar with this change in policy by the IRS. If you have any estates with the statute still open that had a marital deduction or charitable deduction payable out of residue, you might be able to get a refund on this point.

Another problem created by our change in the residue computation was in the computation of residue for the purpose of computing generation skipping transfers. Our change applies to the residue as a whole, not just the marital and charitable provisions. If we assume that the revenue ruling does not apply to the computation of generation skipping transfers, we will need to adjust the computation when we compute residue for the purpose of the generation skipping transfers. So when you compute residue for the purpose of the generation skipping tax, you will need to turn on the complex toggle and specify specificaly that interest is to be charged to residue.

If you are computing residue for both a marital deduction and a generation skipping transfer, you should use the complex toggle to charge the interest directly against the generation skipping transfer.

Federal Interest Rate Change Changes

The federal rate on deficiencies will increase from its current 7% to 8% starting July 1, 1994. Remember to change your interest tables to reflect this increase.

The rate on refunds will also increase from its current 6% to 7% starting July 1, 1994.

IRS Policy on Interest Computation Changes

IRS policy on computation of refund interest was changed in January, 1993. When there was a period where interest was paid on an overpayment of tax by the IRS and there was also interest paid on an underpayment of tax by the Taxpayer for the same period, the IRS will now net the amounts due and compute interest on the net overpayment or net underpayment. In the past, they computed the interest on the two amounts separately.

RAR 3.00 for IRS Estate Tax Attorneys

RAR 3.00 has been completed and will be ready for distribution on Aug. 15, 1994. This is a complete rewrite of the old RAR, IRAR and WORK programs in the HERBY series with an interface similar to Inter-Est 2.00. IRS Employees may receive a free copy by contacting:

George Dewey, Jr.
Supervisory Attorney
Estate and Gift Tax, Territory 2, Area 5
Jacksonville, Florida 32216
Office: (904) 665-1300 ; 665-1298
Fax: (904) 665-1345
Email Address: George.Dewey@irs.gov

Anyone else wanting a copy should contact Cammack Computations Co. The price of a copy will be $125.00.

This program will help you organize your data in audit situations. RAR supports Worksheet TG, the first limitation of the credit for tax on prior transfers,computation of the gift tax credit and has several other worksheets to support tax computation.

Also generates report forms such as:

Forms 886A, 890, 1273, 2297, 3228, 3231A, 3232, 3363, 4349, and 6180.

The version of Form 4349 used has been modifed to support current code provisions.

Some forms such as 3229, and 4808 are not supported because we are now using worksheets placed on Form 886A.

Inter-Est Version 1.10S

We will continue to support Inter-Est Version 1.10 through 1994. After December, 1994, we will only provide support using high density disks and we will not provide additional manuals.

If you are still using a version of Inter-Est prior to Version 2.00 please consider upgrading to Version 2.00. It is stable and should run on your computer. We do not have the capability of supporting multiple versions of the program over an extended time period.

Recent Changes to Ver. 2.00

The recent changes to version 2.00 which have resulted in our current Release 14 are as follows:

	An additional method of interest calculation was added. This is simple interest where interest is charged for a full month (1/12th year) for each month or fraction thereof. Any fractional month at the start of a period is not counted as it would have been used in a prior period.
	The computation of the failure to pay penalty has been changed in the special §6166 penalty provisions. It had been computed just like the amount drawing penalty for the §6166(g)(3) penalty which included the balance of interest on qualified tax (total installment payment due but not paid). This has been changed. It is now based only on the qualified tax due.
	Computation of Massachusetts tax where the decedent was a nonresident has been changed.
	A change was made to the computation of the gift tax credit where the transfer qualifies for the marital deduction. This change will only affect computations for dates of death prior to 1982.
	A change was made in the printout in the application of §2207A right of reimbursement for state tax in the computation of residue where complex was not selected. This change affects the printout, but not the computation.
	We have also made a number of small changes that should make Inter-Est easier to use and more useful to you.

Maintenance and Support

If you are having trouble with a computation using Inter-Est, please call us. We provide support to all of our users.

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Cecil Cammack, Jr. dba
Cammack Computations Co.
P. O. Box 725, Cleburne, TX 76033
Voice: 1 (800) 594-5826
Email: cammack@inter-est.com
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