Court agrees with IRS in calculating 691(c) deduction

Article Abstract:

The authors discuss the US District Court for the Western District of Kentucky's decision in Estate of Cherry, in which the court agreed with the IRS' interpretation of the IRC section 691(c) income tax deduction calculation method.

Tax deductions, Valuation, Estate tax, Estate taxes

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Ninth Circuit reverses Tax Court, and rules no premium for minority voting stock

Article Abstract:

An appellate court ruling that the share value of a minority interest in a firm's voting stock is no greater than the value of a share of non-voting stock is discussed. The argument that a premium could be attributed to voting stock based on possible future developments was rejected.

Interpretation and construction, Cases, Securities law, Minority stockholders

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Installment obligations cancelled at death result in taxable gain, rules tax court

Article Abstract:

The US Tax Court ruled in Estate of Frane that self-cancelling installment notes (SCINs) produce income subject to the income tax at the time of the decedent's death under IRC 453B(a). When it passed IRC 453B(a) and 691(a), Congress' intent was certainly to create taxable income when installment obligations were cancelled, so the result in Frane is in accord with legislative intent. SCINs may still be a good estate planning tool since the income tax levied when an SCIN is cancelled will probably be at a lesser rate than the estate tax on a large estate.

Taxation, Installment contracts, Promissory notes

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