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Brooks v. Comm’r

The IRS disallowed carryover charitable deductions for donation of a conservation easement by taxpayers’ family LLC to the county where the property lies. In addition to the disallowance of the donation deductions, the IRS assessed gross overvaluation penalties. The Tax Court denied the deductions in part for lack of following regulations and procedures. Additionally, the court found that the value determined by the taxpayers’ appraiser was filled with errors and had basic incorrect assumptions resulting in a gross misstatement of value. Thus, taxpayers were liable for the 40% accuracy-related penalty resulting from a gross valuation misstatement pursuant to section 6662(h) as determined for each of the years in issue.

Taxpayer Is Denied Charitable Deduction for a Conservation Easement, and Gross Valuation Misstatement Penalties Are Applied

The IRS disallowed carryover charitable deductions for donation of a conservation easement by taxpayers’ family LLC to the county where the property lies. In addition to the disallowance of the donation deductions, the IRS assessed gross overvaluation penalties. The Tax Court denied the deductions in part for lack of following regulations and procedures. Additionally, the court found that the value determined by the taxpayers’ appraiser was filled with errors and had basic incorrect assumptions resulting in a gross misstatement of value. Thus, taxpayers were liable for the 40% accuracy-related penalty resulting from a gross valuation misstatement pursuant to section 6662(h) as determined for each of the years in issue.

Champions Retreat Golf Founders, LLC v. Comm’r

The Tax Court, on remand from the 11th Circuit, which decided that the taxpayer was entitled to a charitable donation for donation of a conservation easement, now valued that interest to determine the amount of the donation deduction. Both parties presented valuation opinions from expert appraisers. The Tax Court determined that the highest and best use of the property before and after the grant of the easement was the key to the determination of the value of the easement. The Tax Court then analyzed the evidence from the expert appraisals to arrive at a value of the easement.

On Remand, the Tax Court Determines the Value of a Conservation Easement From a Golf Course

The Tax Court, on remand from the 11th Circuit, which decided that the taxpayer was entitled to a charitable donation for donation of a conservation easement, now valued that interest to determine the amount of the donation deduction. Both parties presented valuation opinions from expert appraisers. The Tax Court determined that the highest and best use of the property before and after the grant of the easement was the key to the determination of the value of the easement. The Tax Court then analyzed the evidence from the expert appraisals to arrive at a value of the easement.

District Court Affirms Tax Court’s Decision That Deferred Payments to Spouse Are Not Deductible Alimony Payments

The district court in this appeal from the Tax Court affirmed the Tax Court’s decision that deferred payments the husband made to the wife were not deductible alimony payments and thus not taxable to the wife.

Redleaf v. Comm’r

The district court in this appeal from the Tax Court affirmed the Tax Court’s decision that deferred payments the husband made to the wife were not deductible alimony payments and thus not taxable to the wife.

Couturier v. Comm'r

The Tax Court was asked in this ESOP-related case to approve the taxpayer’s motion for summary judgment. The petitioner contended that the IRS “is precluded as a matter of law from asserting excise tax liability under section 4973” because it did not issue him a notice of deficiency challenging his income tax treatment of the transactions that generated the excess contributions. The motion was denied. The alleged excess contributions were more than $26 million with alleged excise tax of more than $8 million.

Tax Court Denies Taxpayer’s Motion for Summary Judgment Relative to an Excess IRA Contribution Relating to an ESOP Purchase/Sale

The Tax Court was asked in this ESOP-related case to approve the taxpayer’s motion for summary judgment. The petitioner contended that the IRS “is precluded as a matter of law from asserting excise tax liability under section 4973” because it did not issue him a notice of deficiency challenging his income tax treatment of the transactions that generated the excess contributions. The motion was denied. The alleged excess contributions were more than $26 million with alleged excise tax of more than $8 million.

Details start to emerge about the Prince estate valuation

One of the tricky assets to value in the Prince estate was the rock star’s name and likeness.

New IRS Trap for GRATs When There Is a Merger Pending

The Chief Counsel office (IRS) recently released a memorandum, which comes to two primary conclusions. First, under the fair market value standard, the hypothetical willing buyer and willing seller of a company would consider a pending merger when valuing stock for gift tax purposes. Second, the retained interest is not a qualified annuity interest under § 2702 of the Internal Revenue Code (Code) because the donor used an outdated appraisal that did not take into account all the facts and circumstances of a pending merger.

Prince estate and IRS settle valuation dispute

The IRS and Comerica Bank and Trust, the administrator of the estate of rock star Prince, have agreed to settle their dispute and agree on an estate value of $156.4 million, according to settlement documents submitted in the case.

The Nelson Tax Court case ‘has it all’

An appellate court recently affirmed the Nelson Tax Court case, which “has it all” in terms of valuation issues, said Barry Sziklay (Friedman LLP) in his session at the New Jersey CPA Society’s Business Valuation and Litigation Services Conference.

More jabs at the proposed billionaire tax

Although it could give a lot of work to appraisers, the proposed billionaire tax is an example of “really bad tax law,” says the dean of valuation, Aswath Damodaran (New York University Stern School of Business).

IRS sending agents to NACVA’s BV training

The IRS is sending 79 agents to business valuation training provided by the National Association of Certified Valuators and Analysts (NACVA), according to former IRS manager Michael Gregory (Michael Gregory Consulting LLC).

Damodaran on proposed billionaire tax

“A boon for appraisers and accountants,” but it is one of the worst tax proposals ever, says Aswath Damodaran (New York University Stern School of Business), in an appearance on CNBC.

Nelson v Commr.

Taxpayer appealed a Tax Court ruling that she gifted a percentage of partnership interests and not a fixed amount of value. As a result, when the IRS determined the FMV of those interests, the Taxpayer was left with a gift tax deficiency.

Court of Appeals Upholds Tax Court—Taxpayer Gifted a Percentage of Partnership Interests, Not a Fixed Amount

Taxpayer appealed a Tax Court ruling that she gifted a percentage of partnership interests and not a fixed amount of value. As a result, when the IRS determined the FMV of those interests, the Taxpayer was left with a gift tax deficiency.

Insiders Examine Michael Jackson Estate Valuation Dispute

Testifying experts for the estate give their main takeaways from this fierce dispute with the IRS.

Value of Coke’s secret formula could end up in Supreme Court

At last week’s New Jersey CPA Society’s Business Valuation and Litigation Services Conference, Barry Sziklay (Friedman LLP) gave an update on the huge battle between Coca-Cola and the IRS over transfer pricing that involves the trademark and secret formula for the soda giant’s iconic beverage.

Willamette focuses on tax and transfer pricing

Taxation-related valuation and transfer pricing issues are the focus of summer 2021 Insights from Willamette Management Associates.

Prince estate valuation featured on latest AICPA podcast

In the shadow of the recent court decision in the Michael Jackson estate valuation dispute, the estate of pop star Prince is currently locked in a fierce estate and gift tax dispute.

Michael Jackson estate valuers give rare inside look

Experts for the estate of pop superstar Michael Jackson presented a fascinating look at how the valuations were done for the “tax trial of the century” in a BVR webinar.

Power Panel: Estate of Michael J. Jackson v. Commissioner

Are you ready for a thriller? Join us for this Power Panel with three experts who worked on the Estate of Michael of Jackson case: Jay Fishman, Mark Roesler, and David Dunn. Bring your questions and learn about complexities of large cases, celebrity valuations, and what valuation experts can take away from this published case.

Interesting question on the Michael Jackson case

There were three main valuation matters in the case of the Michael Jackson estate versus the IRS, and the estate prevailed in two of them (see our most recent coverage here).

Michael Jackson case featured on BVR ‘power panel’ July 27

Experts involved in the high-profile case involving the Michael Jackson estate versus the IRS will discuss the contentious valuation issues in the case during a BVR webinar, Power Panel: Estate of Michael J. Jackson v. Commissioner.

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