Attorney-at-Law

MORE MATCH THAN MIX

In Uncategorized on 02/18/2021 at 17:11

Valuations of net-leased properties for estate and gift taxes often lead to dueling appraisers, but Estate of Miriam M. Warne, Deceased, William R. Warne and Thomas H. Warne, Co-Executors, 2021 T. C. Memo. 17, file 2/18/21, finds Judge Buch handing out fewer judicial rebukes and resets than usual.

This is an example of a much more nuanced appraisal contest, more chess game than fistfight, and for that reason worthy of attention.

The parties even stipulated to some discounted percentages if the Court sustained certain split-ups of interests among charities. Good job to both counsels; I’d name them if I knew who they were, but DAWSON won’t tell me.

Note Judge Buch’s explication of the difference in valuations as between gift tax due and estate tax charitable deductions. What the giver gave and what the given got aren’t the same. “In short, when valuing charitable contributions, we do not value what an estate contributed; we value what the charitable organizations received.” 2021 T. C. Memo. 17, at p. 53. Your discounts may vary.

I might disagree with Judge Buch’s disregard of any possibility of future intrafamily litigation, especially when long-term net leases held in family LLCs, whose operating agreements give the managing member virtual dictatorial powers, are involved. But maybe that’s the bias of one who has seen too many multi-generational family feuds; the hollers of KY and WV have nothing on Manhattan real estate.

I am surprised that counsel for the petitioner didn’t put in any good faith reliance evidence for the Section 6651(a)(1) gift tax add-on.

 

 

 

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