In Uncategorized on 06/10/2020 at 16:23

I can’t remember the negotiating tactics guru who laid out the reasons why one should never offer to split the difference, but should always accept when the other side offered. Whatever the reasons, if everyone followed his advice, no one would ever offer to split the difference, so no one but Tax Court judges would ever split the difference.

Even in the hotly-contested scenic or conservation valuation wars, differences have been split at The Glasshouse. Splitting has crumbled only at the façades.

Today Judge Pugh does a couple splits (hi, Judge Holmes), worthy of the legendary Nicholas Brothers. Here’s Mary P. Nelson, 2020 T. C. 81, filed 6/10/20, conjoined with spouse James C.

Mary gifted and sold to the family trust her partnership interest in Longspar in two tranches. Longspar held stock in the family holding C Corp. Both partnership and C Corp being closely-helds, there needed to be valuations. The valuations were done post-transfer.

This results in the interests being a percentage rather than a flat dollar amount. Since exactly how what percentage of her interest was being transferred can only be reckoned once the value of the whole is determined. See 2020 T. C. Memo. 81, at pp. 19-21. There are drafting pointers here for the trusts & estates practitioner that well repay reading.

Next are the discounts for control. No one will pay the same to be a passenger as they would pay to be captain.

Come now the dueling experts, culminating with a 5% difference after all the mix-and-match Judge Pugh can manage.

She splits the difference.

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