Valuation Case Alerts
Pluris Valuation Advisors' Valuation Case Alerts are published on an irregular schedule, whenever the Tax Court or higher courts issue decisions on fair market value matters, or when there are new IRS rulings or other news of interest to our private clients and their other advisors.
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Kite Stringing the IRS Along?Estate of Kite Deploys Private Annuities to Reduce the Estate Tax HitIn early 2001 Virginia V. Kite was 74 years old and, while not terminally ill, she was in poor health and wanted to do further estate planning. As a member of a prominent banking family in Read More...
The fact pattern in Wimmer v. Comm’r, TC Memo 2012-157, proved that the Wimmers’ annual exclusion gifts were present interest gifts and not future interest gifts. Thus, the gifts were qualified for the annual gift tax exclusion under Section 2503(b). BackgroundGeorge H. Wimmer (“Decedent”) and his wife (jointly the “Wimmers”) formed Read More...
Formula clauses have become a popular estate planning tool, and for very good reasons. After all, when making gifts, the donor is faced with an unpleasant source of risk: valuation. What if the appraisal is challenged? With a big enough valuation discrepancy, significant gift taxes might be Read More...
What a Waffle!
As a waitress at the Waffle House in Grand Bay, Alabama, Tonda Lynn Dickerson had a regular customer, Edward Seward, who was known as a generous, albeit atypical, tipper. He liked to give lottery tickets. In fact, he liked it so much he would regularly drive from Alabama, which Read More...
Stone v. Comm’r, TC Memo 2012-48 is yet another confirmation that when structured correctly, the taxpayer typically defeats the IRS in a Section 2036 case. BackgroundJoanne Stone (“Decedent”) and her husband owned either wholly or in part approximately 30 parcels of real property in Tennessee, of which nine parcels were mostly Read More...
In Davis, taxpayers are “whipsawed” for a $23.3 million tax deficiencyIn Allen L. Davis, et al v. Comm’r1, TC Memo 2011-286, the IRS applied a section 83 attack on illiquid stock option grants that resulted in a $23.3 million tax deficiency for the individual taxpayers. In addition, the Tax Court held Read More...
Liljestrand v. Comm’r, TC Memo 2011-259 is another bad facts case that propelled the IRS in a Section 2036 attack, and resulted in an approximate $2.6 million federal estate tax deficiency for the taxpayer.
BackgroundDr. Paul H. Liljestrand accumulated his wealth as a general practitioner and surgeon for a medical practice that Read More...
In Estate of Anne Y. Petter et al. v. Commissioner, No. 10-71854 (9th Cir. 2011), the Court affirmed a decision by the Tax Court[i] that allowed for the use of a “formula value” clause. In the Petter case, the Ninth Circuit joins the Fifth and Eighth Circuits on the issue of Read More...
In Adler v. Comm’r, TC Memo 2011-28, the IRS prevailed in a Section 2036 attack, and eliminated fractional interest discounts applied to an estate with a ranch property.BackgroundOn December 8, 1965, Axel O. Adler (Adler) transferred undivided one-fifth interests (to his five children) in his 1,100-acre Rancho Aguila property in Carmel, Read More...
In our currently stressed economic circumstances there may be a parent or two who feels they are not quite enjoying their home as much as before, due to the presence of recently-returned offspring. Whether this was the inspiration for the United States Court of Appeals for the Second Circuit in its Read More...
In Jensen v. Comm’r, TC Memo 2010-182, the estate prevailed on the discount for the Built-in-Gains (“BIG”) tax when determining the fair market value (“FMV”) of the estate’s interest in a company that primarily held real estate. The Jensen case, along with others, directs appraisers to calculate the BIG tax discount using a Read More...
In Pierre v. Comm’r, TC Memo 2010-106, the IRS prevailed on the step transaction doctrine. However, with no appraisal fire power to back it up, the Service’s win ultimately fizzled out when it came time to value the gifts made.
In 2000, Suzanne J. Pierre (petitioner) received a cash gift of $10 Read More...
In Ludwick v. Comm’r, TC Memo 2010-104, the Service struck a major blow for its favored approach to undivided interests, not only winning acceptance of its “cost to partition” approach, but winning the argument on most of the important inputs to the model, yielding a discount that’s a fraction of what Read More...
Gary T. Hurford passed away on April 8, 1999. He was survived by his wife Thelma and three children. Ms. Hurford passed away on February 19, 2001.Mr. Hurford had a conservative estate plan consisting of a bypass trust (the Family Trust) and a qualified terminable interest property (QTIP) trust (the Marital Read More...
At the time of her death, Marjorie deGreeff Litchfield owned a 43.1 percent interest in Litchfield Realty Co. (LRC) and a 22.96 percent interest in Litchfield Securities Co. (LSC), two closely held family-owned corporations. Founded in 1921, LRC primarily held farmland and marketable securities (68 percent and 29 percent of total Read More...
In Estate of Hilde E. Erickson, TCM 2007-207 (April 30, 2007), the IRS determined a $734,599 Federal gift tax and a $718,320 Federal estate tax deficiency of the estate of Mrs. Hilde E. Erickson. The taxpayer petitioned the Court to decide if property of the decedent transferred to a family limited Read More...
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- What We Know
- Tax Court Values Deferred Annuity at Standard Mortality Tables
- Tax Court Declares Wimmer a Winner
- Tax Court Draws Estate Planner's Roadmap in Wandry
- Waffle House Dispute Saves Gift Taxes in Dickerson
- Solid as Stone FLP Circumvents Section 2036 Attack
- Double Dipping: A Faux Pas in Tax Court Too
- Section 2036 Ambush Leaves Dr. Liljestrand's Estate in Need of a Medic
- A Formula for Success: Ninth Circuit Aligns with Fifth and Eighth Circuits on Formula Clause
- In Estate of Adler, Section 2036 Trumps Fractional Interest Discounts
- Second Circuit Reins in Section 2036: Mother Continuing to Share Property with Son Does Not Constitute “Enjoyment and Possession”
- More Valuation Case Alerts...