Lessons to be learned by Valuators from Cavallaro v. Commissioner Cavallaro v. Commissioner holds some valuable lessons for valuation experts. Following a tax-free merger of two companies owned between different family members, the children of the petitioners (and owners of one of the companies, pre-merger) received 81 percent of the stock in the merged entity. Differences arose between one set of accountants and Hale & Dorr, the law firm that assisted the founders with estate planning. The key issue was whether valuable technology was owned by the company controlled by the parents or the company owned by the children. The…
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Fifth Circuit Disallows 40% Valuation Misjudgment Penalty, OKs 20% Negligence Penalty The Court of Appeals for the Fifth Circuit disallows a 40% valuation misjudgment penalty in Bemont Invs., LLC v. United States, but affirms a Texas Court’s 20% negligence penalty. Judge Goeke at the Tax Court draws distinctions on when charitable deductions are allowable in Dunlap v. Commissioner.
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More: A Case in Texas Turns on a Husband and Wife with Differing Appraisals of a Business That’s Declined in Value Peter Agrapides gathers recent federal cases bearing on valuation and family law. In Georgia, a county issues bonds to finance a regional warehouse built by the corporation; the parties agree to use a certain valuation methodology, and since agreement is mentioned in the lease, the Georgia Court of Appeals finds full compliance with that methodology is in fact part of the lease.