Lottery Case and Effect of Transfer Restrictions on Valuing Annuities
6th Circuit joins majority of federal courts in finding that IRS annuity tables are appropriate when valuing nonassignable lottery payments for estate tax purposes.
Estate of Jorgensen v. Commissioner
Tax Court finds not one factor supporting a legitimate, nontax business purpose for family limited partnerships funded with over $2 million in largely untraded marketable securities.
Stone v. U.S. (II)
Ninth Circuit rejects estate’s appeal of 5% discount for a 50% undivided fractional interest in art collection, based on insufficient appraisal evidence to carry the taxpayer’s burden of proof to show that IRS assessment was wrong.
Menard v. Commissioner (II)
Seventh Circuit reverses Tax Court’s determination of reasonable compensation for CEO of third largest retail hardware chain, questioning its reliance on investor rate of return as the sole driver of a decision, and rejecting its comparison to comparable ...
Estate of Litchfield v. Commissioner
Tax Court considers determination of discounts for embedded capital gains taxes, lack of control, and lack of marketability for estate’s interests in two closely held companies, one owning primarily farm land and the other marketable securities.
Negron v. United States (II)
Sixth Circuit joins majority of federal courts in finding that IRS annuity tables are appropriate when valuing non-assignable lottery payments for estate tax purposes.
Tax Court Examines Charitable Deduction
Tax Court denies charitable deductions for donation of intangible goodwill from taxpayers’ medical practices to newly formed healthcare corporation.
IRS and Taxpayer Agree to 35% DLOM—If FLP Transfers Pass ‘Indirect Gift’ Tests
Tax Court accepts stipulated 35% DLOM after finding that FLP funding and transfer is not an indirect gift.
Federal Court Issues New Rule for Valuing Stock in Insurance Demutualization
Federal Claims Court rules against long-standing IRS position that stock in insurance company demutualization has a cost basis of zero value.
Bianca Gross v. Commissioner
Tax Court accepts stipulated 35% DLOM after finding that FLP funding and transfer is not an indirect gift.
Tax Court Rejects Appraisal of Donated Stock for Incorrect Premise of Value
Tax Court approves 64% combined discounts (advocated by IRS) for valuing medical service corporation slated for conversion to a nonprofit.
Fisher v. U.S.
Federal Claims Court rules against long-standing IRS position that stock in insurance company demutualization has a cost-basis of zero value.
Bergquist v. Commissioner of Internal Revenue
Tax Court approves 64% combined discounts (advocated by IRS) for valuing medical service corporation slated for conversion to a non-profit.
Derby v. Commissioner
Tax Court denies charitable deductions for donation of intangible goodwill from taxpayers’ medical practices to newly formed healthcare corporation.
Reasonable Compensation Does Not Consider CEO’s Role in Related Businesses
Tax Court disallows $500,000 bonus to CEO of startup as reasonable compensation, despite company enjoying a 42% return on equity.
Universal Marketing, Inc. v. Commissioner
Tax Court disallows $500,000 bonus to CEO of start-up as reasonable compensation, despite company enjoying a 42% return on equity.
Litman v. United States
Federal claims court rejects IRS and others’ reliance on restricted stock studies to determine appropriate discount for lack of marketability for restricted stock, preferring taxpayer’s option-pricing and CAPM analysis.
IRS Stumbles on Characterization and Valuation of Stock Warrants
Stock warrants issued as part of settlement agreement are not compensation and are taxable at grant date if they have an ascertainable fair market value.
Kimberlin v. Commissioner
Stock warrants issued as part of settlement agreement are not compensation, and are taxable at grant date, if they have an ascertainable fair market value.
Allocation of Stock Purchase Price to Noncompete Must Be Clear, Unambiguous
Tax Court declines to allocate a portion of stock purchase to a noncompete when documents unambiguously allocate the entire price to the stock.
Becker v. Commissioner of Internal Revenue
Tax Court declines to allocate a portion of stock purchase to a non-compete, when documents unambiguously allocate the entire price to the stock.
A Frustrated 7th Circuit Remands Tax Court’s Remands Tax Court’s Mark-to-Market Interest Swap Valuation
7th Circuit overturns Tax Court’s fair market valuation of interest swaps, saying it didn’t give due deference to Commissioner’s calculations.
Taxpayers (and Their Valuator) Vindicated in Appeal of §4958 ‘Excess Benefit’ Transaction
“Cascade of errors” by IRS and Tax Court lead to taxpayer’s (and valuator’s) total victory on appeal of home healthcare company.
JP Morgan Chase & Co. v. Commissioner of Internal Revenue
Seventh Circuit overturns Tax Court’s fair market valuation of interest swaps, saying it didn’t give due deference to Commissioner’s calculations.
Caracci v. Commissioner (II)
The U.S. Court of Appeals for the Fifth Circuit determined that the Tax Court erroneously valued the assets of a non-profit corporation that converted to a for profit corporation and rendered a decision for the taxpayer.