'Safe Harbor Rate' Not Adequate to Present Value Note for Gift Taxes; Circuits Disagree on Issue

Business Valuation UpdateVol. 1 No. 1
Legal and Court Case Update
October 1995

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estate and gift taxation
discount rate, gift tax, present value
Schusterman v. United States
63 F.3d 986
August 22, 1995
US
Federal Court
10th Circuit
United States Court of Appeals
Baldock

Summary

Taxpayer transferred assets in return for a promissory note bearing interest at the then current "safe harbor" interest rate, which was below the prevailing market rate.

See Also

Schusterman v. United States

Full Text of Court Cases
August 22, 1995

At issue is the taxpayers arguement that their use of the six percent safe harbor rate under I.R.C. 483 prevents the IRS from using the prevailing market interest rate to determine the dis ...