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Article: The valuation discount for potential capital gains tax.
- Article from:
- The National Public Accountant
- Article date:
- July 1, 1999
- Author:
CopyrightCOPYRIGHT 1999 National Society of Public Accountants. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Two recent court decisions should prove to be landmark cases in the valuation of closely-held corporations for estate and gift tax purposes. In Irene Eisenberg v. Commissioner,[1] the Tax Court found that the gift tax value of stock in a closely-held corporation should not be discounted to reflect capital gains taxes that would be owed if real estate owned by the corporation were sold. In the appeal which was decided August 18, 1998,[2] the Second Circuit vacated and remanded the decision of the Tax Court, stating that the taxpayer's adjustment for potential capital gains tax liabilities was appropriate. In Estate of Artemus D. Davis,[3] the Tax Court awarded a $9 million ...