Discount for minority general partnership interest allowed

Article Abstract:

The Tax Court found in Estate of Barudin, a memorandum opinion, that a one-ninety-fifth general partnership interest in a real estate partnership was entitled to a 45% discount for lack of marketability and lack of control as a minority interest. The estate had argued for a combined discount of 67.5%, and the IRS had valued the discount at 28%. The Court used market data to impute a minority interest discount of 19%, and it found the lack of marketability discount to be 26% because one individual controlled a majority of the partnership interests and could veto any transfers.

Partnership Interests, Partnership, Partnerships, Decedents' estates, Valuation, Discount (Finance)

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Surviving spouse's disclaimer reduced marital deduction

Article Abstract:

The Tax Court in Estate of Nix, Sr. ruled that a surviving spouse's disclaimer of certain willed assets reduced the value of the marital deduction allowed the estate. The spouse had hoped to make a transaction legal under the unified credit equivalent, but the court ruled that the original will stipulated that the estate value and marital deduction be recalculated in the event of any disclaimers. As such, the disclaimer reduced the marital deduction while raising the taxable value of the estate.

Public Finance Activities, Tax Deductions & Exemptions, Estate Planning, Cases, Tax deductions, Marital deduction

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Reformation was not available for CRT under 1978 will

Article Abstract:

The US District Court in New Jersey ruled in Estate of Reddert that the estate was not entitled to a charitable deduction because the charitable remainder trust created by a pour-over will could not be reformed. The latest date for reformation under the law applicable to the trust and will was Dec. 31, 1981, and the court was unwilling to allow application of IRC section 2055(e)(2)(C), which had been enacted in 1984. The court relied on the date of death and the date of trust formation.

Taxation, Charitable remainder trusts, Wills, Reformation of instruments

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