People planning to expatriate can do a number of things to avoid this result. German citizen’s failure to establish that he was a resident of Germany meant that he was a “covered expatriate” for Sec. 877A purposes and therefore liable for tax on stock sale gains that would otherwise have been exempt under the United States–Germany tax treaty. To read the full article in The Tax Advisor, click: Failure to Abandon U.S. Residency Leads to Tax Liability.
-
-
Assessing Solvency, Fraudulent Transfers, and Liability When Distributions are Made to Minority Shareholders The recent U.S. Tax Court case of Kardash v Commissioner, T.C. Memo, 2015–51 provides guidance regarding transferee liability and underscores how valuations are used to determine when and if a subject company is insolvent. The case also summarizes a number of defenses used (and rejected) to counter a claim of transferee liability.
-
In early 2009, Carl Pohlad, investor and principle owner of the Minnesota Twins, passed away, leaving controlling ownership of the team to his sons. In settling the estate, the new owners now find themselves embroiled in a tax tangle with the IRS. The primary point of contention exists with what Pohlad’s share in the team was actually worth at the time of death. According to the IRS, Pohlad’s ownership is valued at $293 million and is demanding $121 million in additional estate taxes. The estate contests that upon Pohlad’s death, which was shortly after the economic crisis of 2008, the…
-
Federal Cases Examine Bankruptcy, Valuation Standards The Court of Appeals for the Eleventh Circuit weighs in on penalties for “gross valuation misstatement” in Gursthaw v. Commissioner, and the U.S. Bankruptcy Court for the Eastern District of Tennesee rules on the value of mortgage liens In re: Williams.
-
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.