A Taxpayer Loss—Assets Included in the Estate We find ourselves in a familiar place once again—that is, analyzing a case in which the IRS attacked an FLP under I.R.C. § 2036. Just two months ago, I wrote an overview of Estate of Purdue v. Commissioner, (T.C. Memo 2015-249), in which the IRS attacked a closely-held asset holding company, in that case it was an LLC, under I.R.C. §2036. While both holding companies were attacked under Section 2036, the cases could not have ended up more differently for the taxpayers. Purdue was a taxpayer win; Holliday was not.
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Settlement of a Valuation Case Before the U.S. Tax Court This article discusses issues found in a case that is pending before the United States Tax Court (the “Tax Court”). The specific issues relate to issues regarding sales of closely held stock to grantor trusts in exchange for promissory notes. Specifically, the IRS took issue with two grantor sale trust transactions. The two cases were filed on December 26, 2013, as (1) Estate of Donald Woelbing v. Commissioner, Docket No. 30261-13, and (2) Estate of Marion Woelbing v. Commissioner, Docket No. 30260-13.
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Notable 4th Quarter 2015 Cases, Part I of II Part I of this article highlights notable 4th Quarter 2015 U.S. Tax Court Cases that will be of interest to valuation practitioners and business advisors. Estate of Purdue reminds us that taxpayers need to address 2036(a) concerns and establish a non-tax reason. In addition, the case reminds us that gifting an equity or LLC interest may not qualify as a present interest for gift tax purposes. Estate of Newberger involves the proper valuation of artwork, yet its holding is applicable to a business valuation opinion. Sumner Redstone v. Commissioner involves a…
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T.C. Memo. 2015-249: A Checklist to Address 2036 Concerns The issue raised in Estate of Purdue v. Commissioner was whether the “decedent’s desire to have the marketable securities and the building interest held and managed as a family asset constituted a legitimate non-tax motive for the transfer of property to PFLLC.”