Nov 1, 2006 12:00 PM

By Bret A. Tack, managing director, Cogent Valuation, Los Angeles

The Delaware Chancery Court has developed a unique approach to an appraisal issue that has dogged estate and gift tax valuations of subchapter S corporations ever since a string of controversial Tax Court cases earlier this decade. In Delaware Open MRI Radiology Associates, P.A. v. Kessler,¹ the Chancery Court takes direct aim at the Tax Court's repeated acceptance of a methodology that significantly overvalues interests in S corps. The court also presents a cogent discussion of the economic benefits associated with pass-through income tax status and provides a well-reasoned alternative approach for valuing S corps.

The proper valuation treatment of S corps has long been a source of debate in tax appraisals. The sheer number of closely held companies that are S corps (or other pass-through entities such as partnerships and limited liability companies) makes their valuation a hotly contested issue.

Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

E-Newsletter Signup

2011 Trust Glossary

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50 Years Ago This Month

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50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

Conrad Teitell's Guide to Tax Benefits For Charitable Gifts

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