Estate and Gift Valuation E-Flash Updates

Valuation information, of interest to: attorneys, business owners, and tax professionals.

Issue 11:6 : Estate of Samuel P. Black, Jr., Deceased, Samuel P. Black, III, Executor, et al v. Commissioner, 133 T.C. No. 15 Docket Nos. 21388-05, 23191-05, 23516-06, December 14, 2009

Effective estate planning significantly reduced the Decedent’s estate tax liability. Key points in the ruling included:

- Transfers of closely-held stock from the gross estate to an FLP were for full and adequate consideration and therefore not includable in the gross estate.
- Passive entities can be created for legitimate and significant nontax reasons (including preventing the sale of assets by grandsons who lacked ambition and preventing distribution to a spouse in an anticipated divorce proceeding).
- Date of death of surviving spouse was reasonable date for funding of QTIP trust given death of husband and wife were close together and estates were so intertwined.
- Interest on a loan to pay estate tax and associated fees was not deductible in this case.
- Significant portions of the Estate's attorney and exedutor's fees were disallowed for one estate but includable in the other.

Issue 11:4 : Pierre v. Commissioner, 133 T.C. No. 2, August 24, 2009

The Tax Court was asked to determine whether transfers of interests in a single-member LLC should be valued as direct transfers valued as an undiscounted, proportionate share of the LLCs assets or as transfers of interests in the LLC, thus being subject to valuation discounts.

Issue 11:2 : Miller v. Commissioner, T.C. Memo. 2009-119, May 27, 2009

The Tax Court determined whether a discount was appropriate to apply to cash and securities transferred to a family limited partnership.

Issue 11:1 : Litchfield v. Commissioner, T.C. Memo. 2009-21, January 29, 2009

The Tax Court calculated the discount for built-in capital gains taxes in a recently converted “C” to “S” corporation, along with discounts for lack of control, and lack of marketability.

Building Value Success through Collaboration, a business valuation newsletter for business owners and the professionals who advise them.

Volume 7 Issue 1
The "Value" of "Investments" in A/R and Inventory, Case Update - Jelke V. Commissioner

Volume 4 Issue 3
Plan Now If You Intend To Sell Later, An IRS Audit And A Subsequent Event

Volume 4 Issue 1
Key Financial Metrics For Software Companies, Tips For Attorneys Working With A Business Appraiser In Estate And Gift Settings

Volume 3 Issue 3 - pdf format 96 kb
Collaborative Law And The Business Appraiser:  A Common Sense Approach, Exit Strategies For The Business Owner:  Don't Let The Door Hit You On The Way Out, Case Summary--Peracchio V. Commissioner

Volume 3 Issue 2
Four Ways To Falter In Being An "Expert" Expert, The Family Limited Partnership--Still A Viable Financial Planning Tool, Case Summary--Estate Of Helen A. Deputy

Volume 2 Issue 2 - pdf format 86 kb
Basics And Benefits Of An Employee Stock Ownership Plan, Tips On Drafting LLC/FLP Agreements, Fifth Circuit Reverses Tax Court Decision On Partnerships  

Volume 2 Issue 1
Business Value:  Who, Why, And What World?  Role Of Mergers And Acquisitions Advisor, Gifts In A Family Partnership 

Volume 2 Issue 1 Supplemental
Valuation For Financial Reporting

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