Steve Akers and Ron Aucutt, of Bessemer Trust, have published their summary of Nelson v. Commissioner, TC Memo 2020-81. The summary of their presentation and case summary is as follows:
In this Estate Planning Case Summary and video, Nelson v. Commissioner, T.C. Memo. 2020-81, Senior Fiduciary Counsels Steve Akers and Ron Aucutt share an approach for valuing hard-to-value assets by transferring dollar amounts with the size of transferred interests determined by appraisals shortly after the transfers. The case addresses various interesting issues, including:
- The transfers were not “defined value transfers” determined by values as finally determined for gift tax purposes.
- Multi-tiered discounts were allowed in valuing interests in a partnership that, in turn, owned a minority interest in a holding company that owned various subsidiaries with operating businesses.
- The court determined lack of control and lack of marketability discounts in order to value the transferred interests.
- The overall result was a 70% victory for the taxpayer, compared to the IRS’s asserted values.
We recommend that you download the Nelson v. Commissioner, T.C. Memo. 2020-81 document prior to watching, as Steve and Ron refer to it throughout the video.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.