Estate of Jensen v. CommissionerEstate of Jensen v. Commissioner

Tax Court holds that the discount for the tax on built-in gains should take into account both future appreciation on property and the present value discount for the projected capital gains tax

In Estate of Jensen v. Comm'r, T.C. Memo 2010-182 (Aug. 10, 2010), the question before the Tax Court was how to determine the discount for the built-in capital gains tax for property owned by a C corporation. Both the taxpayer and the Internal Revenue Service agreed that a discount for built-in capital gains was appropriate because a willing buyer would consider the built-in capital gains liability and demand a discounted purchase price. See Treasury Regulations Section 20.2031-1(b) (estate tax valuation is determined by a willing buyer/willing sell...