Estate Valuation Can’t Ignore Historical Data, Tax Court Says
Tax court disapproves of estate’s “conflicting expert reports” as to value of decedent’s 100% interest in a C corp. but ultimately adopts estate’s DCF valuation, finding its treatment of personal goodwill is more credible than the IRS’s approach.
Cavallaro v. Commissioner
Taxpayer parents incurred gift tax liability when, based on improper valuations, they agreed to merge their S corp. with their sons’ S corp. and accepted an unduly low interest in the new company while sons received an unduly high interest, Tax Court says ...
Taxpayer Scores Partial Success in Cal. Hotel Property Tax Suit
Appeals court says assessor’s version of income approach to determine hotel property taxes violates law because it does not identify, value, and exclude certain intangible assets; but management fee deduction largely captures hotel’s goodwill.
B & L Development LLC v. City of Norton Shores
Appeals court says tax tribunal did not abdicate its gatekeeper role under Rule 702 when admitting taxpayer expert’s appraisal, where the expert was qualified and used a reliable methodology; a searching inquiry into the underlying data was not necessary.
Estate of Adell v. Commissioner
Tax court disapproves of estate’s “conflicting expert reports” as to value of decedent’s 100% interest in a C corp. but ultimately adopts estate’s DCF valuation, finding its treatment of personal goodwill is more credible than the IRS’s approach.
Bross Trucking, Inc. v. Commissioner
Tax Court says taxpayer’s company owned no corporate goodwill and had no right to taxpayer’s personal goodwill and, therefore, was not liable under IRC Sect. 311(b)(1); the taxpayer, in turn, was not liable for gifting corporate goodwill to his sons.
SHC Half Moon Bay, LLC v. County of San Mateo
Appeals court says assessor’s version of income approach to determine hotel property taxes violates law because it does not identify, value, and exclude certain intangible assets; but management fee deduction largely captures hotel’s goodwill.
Tax Ct. How-to of Valuing Holding Company, Avoiding Accuracy Penalty
Tax Court favors net-asset-value over capitalized-dividend approach for FMV determination of interest in holding company with marketable securities because NAV starts out on “firm ground” with stock prices one can look up whereas income approach relies en ...
Appeals Court Tiptoes Around Tax Affecting in Divorce Setting
Appeals court agrees that in valuing husband’s S corp for marital distribution “national case law” (Kessler, Bernier) supports his expert’s tax affecting but says it must defer to trial court’s decision to adopt competing expert’s position not to tax affe ...
Estate of Richmond
Tax Court favors net-asset-value over capitalized-dividend approach for FMV determination of interest in holding company with marketable securities because NAV starts out on “firm ground” with stock prices one can look up whereas income approach relies en ...
Tax Court Foils ‘End Run’ Around Expert Rules
Tax Court rejects taxpayer’s attempt to place in evidence a new appraisal regarding the decedent’s interest in an LLC whose principal asset was real estate by way of stipulation, finding he failed to qualify the appraiser as an expert and did not present ...
Hamelink v. Hamelink
Appeals court agrees that in valuing husband’s S corp for marital distribution “national case law” (Kessler, Bernier) supports his expert’s tax affecting but says it must defer to trial court’s decision to adopt competing expert’s position not to tax affe ...
Court Rejects Expert’s Regression Equation to Determine DLOM
In determining the fair market value of a revocable trust’s interest in an LLC, the Tax Court adopts the IRS expert’s marketability discount and valuation; he rightly assumed it was reasonably foreseeable at the time of the decedent’s death that the trust ...
Estate of Tanenblatt v. Commissioner
Tax Court rejects taxpayer’s attempt to place in evidence a new appraisal regarding the decedent’s interest in an LLC whose principal asset was real estate by way of stipulation, finding he failed to qualify the appraiser as an expert and did not present ...