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Tax Court’s Exelon ruling, turning on compromised appraisals, withstands appeal

In 2016, Tax Court Judge Laro ruled on the legitimacy of a series of Section 1031 transactions involving Exelon, an Illinois-based energy giant.

Exelon Corp. v. Commissioner

Appeals court upholds Tax Court’s ruling that taxpayer’s transactions do not represent section 1031 like-kind exchanges because taxpayer never assumed ownership of replacement plants; improper input from taxpayer’s law firm tainted appraisals used to show otherwise; accuracy penalty is justified.

Appeals Court Upholds Tax Court’s Section 1031 Decision Pivoting on ‘Tainted Appraisals’

Appeals court upholds Tax Court’s ruling that taxpayer’s transactions do not represent section 1031 like-kind exchanges because taxpayer never assumed ownership of replacement plants; improper input from taxpayer’s law firm tainted appraisals used to show otherwise; accuracy penalty is justified.

Compromised Asset Appraisals Undo Like-Kind Tax Plan

Tax Court says taxpayer’s transactions fail to meet Section 1031 requirements for income tax deferral; legal advisor’s ongoing interference with appraisal process compromised asset appraisals undergirding transactions to the point they became “useless.”

Key Tax Ruling From Ohio Supreme Court Concerning Pass-Through Entity

Ohio Supreme Court says tax provision imposing state income tax on capital gain realized by nonresident investor in pass-through entity violates taxpayer’s due process rights barring showing taxpayer’s activities are “unitary with” those of the business.

Compromised Asset Appraisals Undo Like-Kind Tax Plan

Tax Court says taxpayer’s transactions fail to meet Section 1031 requirements for income tax deferral; legal advisor’s ongoing interference with appraisal process compromised asset appraisals undergirding transactions to the point they became “useless.”

Exelon Corp. v. Commissioner

Tax Court says taxpayer’s transactions fail to meet Section 1031 requirements for income tax deferral; legal advisor’s ongoing interference with appraisal process compromised asset appraisals undergirding transactions to the point they became “useless.”

Key Tax Ruling From Ohio Supreme Court Concerning Pass-Through Entity

Ohio Supreme Court says tax provision imposing state income tax on capital gain realized by nonresident investor in pass-through entity violates taxpayer’s due process rights barring showing taxpayer’s activities are “unitary with” those of the business.

Corrigan v. Testa

Ohio Supreme Court says tax provision imposing state income tax on capital gain realized by nonresident investor in pass-through entity violates taxpayer’s due process rights barring showing taxpayer’s activities are “unitary with” those of the business.

Ohio Appeals Court Clarifies Provision on Tax Affecting at Divorce

Appeals court says consideration of tax consequences related to owner-spouse’s business is “too speculative” because owner has no plan to sell in near future; trial court improperly assumed current tax rates and business interests would remain constant.

Nieman v. Nieman

Appeals court says consideration of tax consequences related to owner-spouse’s business is “too speculative” because owner has no plan to sell in near future; trial court improperly assumed current tax rates and business interests would remain constant.

Use of Asset-Level Deductions Hinges on Business Strategy

State’s high court strikes down district court’s fair value determination, finding reliance on prior law prohibiting use of deductions was misguided where company pursued strategy of selling off real estate and other assets at time of triggering event.

Valuations Bolster IRS’s Transferee Liability Claim

In transferee liability case, Tax Court finds IRS proved petitioner was liable for causing company’s fraudulent asset transfers and benefitted from intermediary company’s fraudulent transfer; valuations showed company was insolvent at time of transfers.

Utah Resources International, Inc. v. Mark Technologies Corp.

State’s high court strikes down district court’s fair value determination, finding reliance on prior law prohibiting use of deductions was misguided where company pursued strategy of selling off real estate and other assets at time of triggering event.

Cullifer v. Commissioner

In transferee liability case, Tax Court finds IRS proved petitioner was liable for causing company’s fraudulent asset transfers and benefitted from intermediary company’s fraudulent transfer; valuations showed company was insolvent at time of transfers.

10 takeaways from Estate of Richmond

Ignoring Accountant’s Advice, Taxpayers Botch Investment Strategy

Tax Court finds taxpayers engaged in “prohibited transactions” under IRC Section 4975(c(1)(B) when making personal guaranties on a promissory note to a company they had bought via IRAs for purposes of deferring until retirement any income tax liability on ...

Peek v. Commissioner

Tax Court finds taxpayers engaged in “prohibited transactions” under IRC Section 4975(c(1)(B) when making personal guaranties on a promissory note to a company they had bought via IRAs for purposes of deferring until retirement any income tax liability on ...

Tax Court Accepts Negative Industry Risk Premium and Unique Combined Discount Matrix

The decedent, Helen Deputy, formed a family limited partnership comprised of 99% of a limited partnership interest retained by Deputy and two 0.5% general partnership interests, one held by Deputy and one held by her son.

Estate of Deputy v. Commissioner

Issue was the fair market value of a 19.99% interest of stock owned by an FLP, and court discussed negative industry risk premium and unique matrix for determining marketability discount.

1999 in review: What we learned in a busy year

My 30 th year in the business valuation profession ( see December 1999 BVU , p.1) was an active one in terms of development in the profession. Here are some of the highlights: l 1999 was o ...

Court Disallows Built-In Capital Gains Discount

At issue is whether the estate of Welch is entitled to discount the value of stock for built-in capital gains taxes, causing a deficiency of $59,987 in federal estate taxes.

Estate of Welch v. Commissioner (I)

At issue is whether the estate of Welch is entitled to discount the value of stock for built-in capital gains taxes.

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