Before Malcolm Forbes Sr. died six years ago, his reputed net worth was somewhere between $400 million and over a billion, according to various estimates reprinted in Forbes magazine in 1989. Under the tax laws, the State of New Jersey and the IRS could have collected between $220 million and $600 million on an estate of that size. But according to documents obtained by NEWSWEEK, Forbes’s estate was valued for tax purposes by the state and Feds at $109,753,906–one fourth to one tenth of published estimates of his wealth. Based on his review of those documents for NEWSWEEK, former IRS commissioner Sheldon Cohen estimates that Forbes’s heirs paid roughly $60 million. Documents filed in New Jersey Tax Court offer few clues to how the taxable value of the Forbes estate ended up so low. Many of the wealthy use elaborate tax-deferring trusts or give gifts. The Forbes documents indicate that Malcolm made generous gifts to Steve and his other children while he was still alive (taxes on gifts are lower than on inheritances). Steve Forbes took over as executor of the estate when his father died in 1990. A letter in 1992 reveals that Steve initially valued the estate at only $82 million but that the IRS boosted it to $109.8 million. Undaunted, Steve the next year sued New Jersey over an estate ruling, won and saved about $675,000 in inheritance taxes. Asked about these actions and documents, a campaign spokesman said, “The estate has been settled.”
