8th Circuit Affirms District Court—Includes Life Insurance Proceeds in Value of Redeemed Shares

BVLaw
Court Case Digests
June 2, 2023
5033 Roofing, Siding, and Insulation Materials
423330 Roofing, Siding, and Insulation Material Merchant Wholesalers
estate and gift taxation
fair market value (FMV), stock, redemption, willing buyer

Connelly v. United States (I)
70 F.4th 412; 2023 U.S. App. LEXIS 13629; 2023-1 U.S. Tax Cas. (CCH) P60,737
US
Federal Court
8th Circuit
United States Court of Appeals
Gruender

Summary

The importance of this case was that the 8th Circuit’s decision to affirm the lower court and IRS’ inclusion of life insurance proceeds in the value of the corporation for which decedent’s stock was redeemed. This contradicted the decision of the 11th Circuit in Estate of Blount that 26 C.F.R. § 20.2031-2(f)(2) precluded the inclusion of life-insurance proceeds in the corporate value when the proceeds were used for a redemption obligation.

See Also

Connelly v. United States (I)

The importance of this case was that the 8th Circuit’s decision to affirm the lower court and IRS’ inclusion of life insurance proceeds in the value of the corporation for which decedent’s stock was redeemed. This contradicted the decision of the 11th Circuit in Estate of Blount that 26 C.F.R. § 20.2031-2(f)(2) precluded the inclusion of life-insurance proceeds in the corporate value when the proceeds were used for a redemption obligation.