- Ag Docket
The decedent's estate held a 41.128 percent limited partner interest in a partnership that was involved in forestry operations. The Tax Court weighted at 75 percent the partnership value of $52 million as determined by a cash flow method (going concern) and a 25 percent weight a value of $151 million via the asset value method. There was no evidence that any sale or liquidation was anticipated. The result was that the estate's interest was valued at 27.45 million rather than the $13 million amount that the estate valued the interest at or the $33.5 million that the IRS value the interest at. The Tax Court, as to the cash flow value, allowed a lack of marketability discount. The Tax Court did not impose any accuracy-related penalty. On appeal, the appellate court reversed as to the 25 percent valuation weight and remanded the case to the Tax Court for a recalculation of the value of the decedent's interest based on the partnership being valued as a going concern. The appellate court stated that the Tax Court had engaged in "imaginary scenarios." Estate of Giustina v. Comr., No. 12-71747, 2014 U.S. App. LEXIS 22961 (9th Cir. Dec. 5, 2014), rev'g. in part, T.C. Memo. 2011-141
CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.