Estate of Cecil v. Comm’r

BVLaw
Full Text of Court Cases
February 28, 2023
7999 Amusement and Recreation Services, NEC
713990 All Other Amusement and Recreation Industries
federal taxation
discount rate, tax affecting, appraisal, cash flow, discount, fair market value (FMV), gift tax, liquidation, minority interest, stock, earnings, comparable, gift, shareholders

Estate of Cecil v. Comm’r
T.C. Memo 2023-24; 2023 Tax Ct. Memo LEXIS 24
US
Federal Court
Federal
United States Tax Court
David Adams, George Hawkins, Gretchen Wolf, Robert Morrison
Ashford

Summary

This was a gift tax valuation case the U.S. Tax Court decided. Gifts of minority interests in The Biltmore Co. were made from the its shareholders, the Cecils, to their children and grandchildren. The IRS audited the gift tax returns and assessed deficiencies for reporting too low fair market values of the gifts of The Biltmore Co. stock. Both sides presented experts to value the gifted interests. The experts agreed that the cash flows should be tax affected. The court accepted the tax affecting while allowing that it was not an admission by the Tax Court that tax affecting should apply in all cases. The Tax Court made changes to the values presented and cobbled together a final value that resulted in refunds to the taxpayers/petitioners.
Estate of Cecil v. Comm’r
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See Also

Tax Court (Grudgingly) Allows Tax Affecting Under the SEAM Method

This was a gift tax valuation case the U.S. Tax Court decided. Gifts of minority interests in The Biltmore Co. were made from the its shareholders, the Cecils, to their children and grandchildren. The IRS audited the gift tax returns and assessed deficiencies for reporting too low fair market values of the gifts of The Biltmore Co. stock. Both sides presented experts to value the gifted interests. The experts agreed that the cash flows should be tax affected. The court accepted the tax affecting while allowing that it was not an admission by the Tax Court that tax affecting should apply in all cases. The Tax Court made changes to the values presented and cobbled together a final value that resulted in refunds to the taxpayers/petitioners.