Tax Law Update 2008-01-01Tax Law Update 2008-01-01
Stock is discounted by the full amount of a company's unrealized gains. In Estate of Jelke III (2007-2 USTC para. 60,552), the U.S. Court of Appeals for the Eleventh Circuit held that the estate tax value of a decedent's stock in a closely held investment company should be discounted for the company's built-in capital gains tax liability, vacating and remanding a decision by the U.S. Tax Court (T.C.
January 1, 2008
David A. Handler partner in the Chicago office of Kirkland & Ellis LLP
Stock is discounted by the full amount of a company's unrealized gains. In Estate of Jelke III (2007-2 USTC para. 60,552), the U.S. Court of Appeals for the Eleventh Circuit held that the estate tax value of a decedent's stock in a closely held investment company should be discounted for the company's built-in capital gains tax liability, vacating and remanding a decision by the U.S. Tax Court (T.C. Memo. 2005-131). The company involved held and managed investments for its shareholders. At the time of the decedent's death, it had a $51 million potential tax liability.
The Eleventh Circuit followed the Fifth Circuit's decision in Estate of Dunn v. Commissioner, 301 F.3d ...
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