Estate Valuation Can’t Ignore Historical Data, Tax Court Says

Business Valuation UpdateVol. 20 No. 10
Legal and Court Case Update
October 2014

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4899 Communications Services, NEC
517410 Satellite Telecommunications
estate and gift taxation
expert testimony, personal goodwill, asset approach, discounted cash flow (DCF), estate tax, fair market value (FMV), hypothetical buyer, balance sheet, company specific risk, stock valuation
Estate of Adell v. Commissioner
2014 Tax Ct. Memo LEXIS 155
August 4, 2014
US
Federal Court
Federal
United States Tax Court
Jeffrey M. Risius, C. Alex W. Howard (estate-petitioner); Francis X. Burns (IRS-respondent)
Paris

Summary

Tax court disapproves of estate’s “conflicting expert reports” as to value of decedent’s 100% interest in a C corp. but ultimately adopts estate’s DCF valuation, finding its treatment of personal goodwill is more credible than the IRS’s approach.

See Also

Estate of Adell v. Commissioner

Full Text of Court Cases
August 4, 2014

Tax court disapproves of estate’s “conflicting expert reports” as to value of decedent’s 100% interest in a C corp. but ultimately adopts estate’s DCF valuation, finding its treatment of personal goodwill is more credible than the IRS’s approach.