Noteworthy Decisions and SettlementsNoteworthy Decisions and Settlements

Over  the past year, the courts decided several interesting cases involving the transfer and valuation of business interests and real estate. Here’s a summary of several of these significant decisions.

Contingent Tax Liability

In Jean Steinberg v. Commissioner,¹ the Tax Court addressed two issues: (1) whether a donee’s promise to pay federal or state estate tax liability that may arise under Internal Revenue Code Section 2035(b), if the donor dies within three years of the gift, should be considered in determining the fair market value (FMV) of the gift; and (2) if so, whether the promised amount, if any, reduces the FMV of the gift.

Meyer Steinberg died on Dec. 4, 2003. He left a will that established a marital trust. Jean, his wife, was ...