Do BV Methods Apply to Determining Discount for Fractional Interest in Art?
Court considers limits to business valuation “science” for determination of discounted value of fractional interest in art.
Estate of Thompson v. Commissioner (II)
Second Circuit rejects taxpayer’s contention that should IRS fail its burden of proof, then the court must defer to estate’s valuation analysis.
Litman v. United States
Federal Court of Claims prefers option-pricing models to quantify marketability discounts for large block of restricted Internet stock.
Stone v. United States
Finding that the estate failed to carry its burden to prove support for 35% discount in fractional (50%) interest in art, the Court confirms IRS 5% discount.
Two Cases Question FLPs as Estate Planning/Asset Protection Devices
IRS allowed 33% combined discount for FLP—but court rules that state (Pennsylvania) Department of Revenue does not have to defer to IRS calculations to disallow discount.
Estate of Cyril Magnin v. Commissioner (II)
*This Memorandum Opinion supplements our Memorandum Opinion in Estate of Magnin v. Commissioner, T.C. Memo. 1996-25, revd. and remanded 184 F.3d 1074 (9th Cir. 1999). T.C. Memo. 2001-31 UNITED STATES TAX COURT ESTATE OF CYRIL I. MAGNIN, DECEASED, DONALD ISAAC MAGNIN, EXECUTOR, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent* Docket No. 24883-92. Filed February 12, 2001. Stuart S. Lipton, Frederick J. Adam, Jerome B. Falk, Jr., Douglas A. Winthrop, and Denise M. Riley, for ...
Davis v. United States
Second Circuit finds that although IRC annuity tables do not account for lack of marketability of lottery payments, the discount is not so substantial as to warrant departure therefrom.
Valuation Discounts Not Permitted in Light of Possible Section 691 (c) Deduction
The IRS denied discounts for potential income tax and lack of marketability in determining the value of the estate’s several IRAs.
Negron v. United States (I)
Sixth Circuit finds that government annuity tables do not accurately reflect fair market value of lottery payments, and continues case for expert evidence.
Stone v. U.S. (I)
Court considers limits to business valuation “science” for determination of discounted value of fractional interest in art.
In re Estate of Berry
IRS allowed 33% combined discount for FLP—but Court rules that state (Penn.) Department of Revenue does not have to defer to IRS calculations to disallow discount.
Tax Court Determines Methodology, Discounts for Large Block of Public Shares
Tax Court decides appropriate valuation methodology and discounts for a large block (13%) of publicly traded, restricted shares.
Another FLP Deduction Disallowed for Lack of Viable Business Purpose
Tax Court includes asset of family limited partnership (FLP) in estate, as FLP had no legitimate business purpose, other than tax avoidance.
Estate of Gimbel v. Commissioner of Internal Revenue
Tax Court decides appropriate valuation methodology and discounts for a large block (13%) of publicly traded, restricted shares.
Estate of Korby v. Commissioner of Internal Revenue
Tax Court includes asset of Family Limited Partnership (FLP) in estate, as FLP had no legitimate business purpose, other than tax avoidance.
Reasonable Compensation Analysis Rejected for Lack of Reasonable Comparables
Court rejects reasonable compensation analysis for lack of reasonable comparables to broker/dealer in convertible securities.
Tax Court Declines to Tax Affect S Corp in Gift Transfer Case
In a post-Gross decision, the Tax Court considers tax affecting S corp earnings and also discounts for lack of marketability and control.
Patricia A. Schade v. Jack E. Gethman
The Iowa Court of Appeals adopted the independent expert’s opinion as to the officer’s compensation over the corporate accountant’s opinion in this trust accounting matter. It based its decision as to officer compensation on consideration of the different ...
Reasonable Compensation for Officer of Real Estate Business
The Iowa Court of Appeals adopted the independent expert’s opinion as to the officer’s compensation over the corporate accountant’s opinion in this trust accounting matter.
Estate of F. Wallace Langer et al. v. Commissioner
Estate of F. Wallace Langer et al. v. Commissioner; T.C. Memo. 2006-232; No. 11116-04 (30 Oct. 2006) ESTATE OF F. WALLACE LANGER, DECEASED, CLARENCE D. LANGER, JR., EXECUTOR, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent UNITED STATES TAX COURT Filed October 30, 2006 John H. Draneas, for petitioner. Wesley F. McNamara, for respondent. MEMORANDUM FINDINGS OF FACT AND OPINION HAINES, Judge: Respondent determined a Federal estate tax deficiency of $949,686 against the Estate of ...
5th Circuit Reverses McCord, Confirming Original Valuation of Marketability Discounts
5th circuit overturns McCord v. Comm’r (Tax Court, 2003) and confirms calculation of marketability discounts in complex gift tax case.
Dallas v. Commissioner
In a post-Gross decision, the Tax Court considers tax-affecting S Corp earnings and also discounts for lack of marketability and control.
Kohler: Textbook Valuation of Large Closely Held Corporation Leads to Total Victory for Taxpayer
A “textbook case” on how to value a large, closely held corporation, complete with discussion of dividend method and appropriate discounts.
‘Classic’ FLP Case by Judge Laro Finds No §2036 Estate Tax Exception
Classic case where Tax Court (Judge Laro) finds no §2036 estate tax exclusion for family limited partnership (FLP).
McCord v. Commissioner (II)
Fifth circuit overturns McCord v. Comm’r (Tax Court, 2003), and confirms calculation of marketability discounts in complex gift tax case.