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.
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Fifth Circuit Affirms District Court and $83 Million in Unpaid Taxes and Interest Owed by Donees The Fifth Circuit recently affirmed the district court’s decision and the imposition of unpaid taxes and interest on donees of shares sold at less than fair market value to the company owed by relatives of the donor. As Joe Brophy explains, this case illustrates the pitfalls of deathbed planning involving asset transfers below market value.