US Tax Court Judge Laro and Shannon Pratt hit the market with their updated Business Valuation & Federal Taxation
This is the must-have text in the field from Judge David Laro and Shannon Pratt. Besides the essentials the 2nd Edition (the first came out in 2005) includes coverage of: Personal versus enterprise goodwill New materials on transfer pricing and customs valuations and how recent markets have affected both the income and market approaches Coverage [...]
Fractional interest in estate tax turns on type, timing of gift
Estate of Adler v. Commissioner of Internal Revenue, T.C. Memo. 2-11-28, 2011 WL 300144 (U.S. Tax Court)(Jan. 31, 2010) A father owned a California ranch on more than 1,000 acres. In 1965, he gifted undivided one-fifth interests to his five children as tenants-in-common, reserving his own “full use and control” of the property throughout his [...]
Best way to gift property: FLPs or fractional interest?
A father owned over 1,000 acres of California ranch land, worth $6.4 million at his death. The estate applied a 48% combined discount for lack of marketability and lack of control, because thirty years before, the father had gifted equal, undivided interests to his five children as tenants-in-common, reserving “full use and control” of the [...]
New case digests added to BVLaw
Metro Tech Corp. v. TUV Rheinland of N.A., 2010 WL 4117123 (D. Puerto Rico.)(Oct. 18, 2010); and Metro Tech Corp. v. TUV Rheinland of N.A., 2010 WL 4117115 (D. Puerto Rico.)(Oct. 18, 2010) Court limits damages to breach of contract to those that can be ascertained with reasonable certainty, and qualifies first-time lost profits plaintiff’s [...]
Tax Court accepts taxpayer’s dollar-for-dollar discount for built-in capital gains tax liability (sort of. . . )
A wealthy New Yorker owned the majority (82%) of a closely held C Corp, which in turned owned 94 acres of lake front property in New Hampshire, including state-of-the-art athletic facilities, horse stables, and a summer camp for girls. When the owner died, the estate’s appraiser determined a net asset (adjusted book) value for the [...]
When is professional goodwill a personal asset?
In 1980, Larry Howard, DDS, incorporated his practice, becoming the sole shareholder, officer, and director. He also entered a covenant not to compete (in effect, protecting his company from himself). Whatever his objective, when he retired in 2002 and sold his practice to another “corporate” dentist, the parties’ purchase agreement allocated nearly $550,000 to Dr. [...]
More background on Ringgold victory, in which industry experience held sway with the Tax Court
Ringgold Telephone Co. v. Commissioner., T.C. Memo. 2010-103, 2010 WL 1850426 (U.S. Tax Ct.)(May 10, 2010) BVLaw Alert subscribers have been alerted to the trend for an expert witness’ industry experience to trump professional background. We’ve mentioned several cases, including one of the most interesting, Ringgold. Ringgold, the taxpayer, provides telecommunications services in Georgia and Tennessee. [...]
IRS, Tax Court judges keynote Georgetown Law/BVR tax and valuation conference
In their only joint public meeting this year, three of the most important leaders from the Internal Revenue Service will discuss the implementation, enforcement, and appeals of Service regulations at the Advanced Summit on Business Valuation: Resolving Tax & Legal Issues, presented by BVR and Georgetown School of Law. Moderated by Jay Fishman, an expert appraiser and member [...]
Laro: Be aware of precedent in your jurisdiction
Did you know that the taxpayer’s residence determines in what jurisdiction the Tax Court “sits” and what federal circuit law applies? These are just one of the illuminating facts presented by Judge David Laro and business appraiser Mel Abraham during their session at the San Fran Valuation Roundtable last week. The attendees, mostly business appraisers, [...]
Ludwick v. Commissioner: Tax Court devises its own weighted approach to value an undivided real property trust
A decision last Monday by Judge Halpern of the U.S. Tax Court implies a tougher stance on discounts for real property interests. The facts in the new decision, Ludwick v. Commissioner, are as follows: A California couple owned a vacation home on Hawaii’s Big Island as tenants in common. In 2005, they transferred their separate, [...]
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