The Nelson Tax Court case ‘has it all’

BVWireIssue #231-3
December 15, 2021

federal taxation
estate & gift, fair market value (FMV), gift tax, partnership interest, appraiser

An appellate court recently affirmed the Nelson Tax Court case, which “has it all” in terms of valuation issues, said Barry Sziklay (Friedman LLP) in his session at the New Jersey CPA Society’s Business Valuation and Litigation Services Conference. The issues in the case include:

  • Do the cost, income, and market approaches produce a control versus a minority level of value?
  • Are so-called guideline companies and closed-end funds truly comparable to the subject company?
  • Are restricted stock and pre-IPO studies useful to determine a DLOM?
  • Is the Mergerstat Review useful to determine a DLOC?
  • What is the relationship between tiered entities with regard to valuation discounts?

The case is Nelson v. Commissioner, T.C. Memo 2020-81, which an appellate court recently affirmed. An analysis and full opinion of both the original case and appellate court case are available on the BVLaw platform.

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