Video

  • 43 minutes

Government Attempts to Limit Valuation Discounts

 
The IRS attempts to avoid application of “hypothetical” willing buyer/willing seller. There is contention that bundle of rights associated with family-owned asset can be more easily manipulated, with rights parceled out to family members. This was embodied in legislation in Chapter 14 Special Valuation Rules. In Revenue Ruling 93-12, the IRS reluctantly abandoned “unity of ownership” or “family attribution” theory with respect to minority discounts. Intra-family transfers of closely held stock are valued without consideration of the fact that control of a corporation rests in the family. Minority discount not disallowed solely because transferred interest, when aggregated with interests held by family members, would be part of a controlling interest. Compare IRS swing vote argument: minority blocks entitled to much smaller discounts because they have “swing vote” powers could influence company actions by affiliating with another block of stock. This is generally rejected by courts.

In this video our speaker, Christine Quigley, discusses I.R.C. Section 2701 special valuation rules and definitions. She also reviews applicable retained interests and application of the subtraction method of valuation.

Christine Quigley is a partner in the Private Clients, Trusts and Estates group of Schiff Hardin LLP. She advises affluent individuals and families in wealth transfer planning, tax planning, estate and trust administration, and business succession planning. Mr. Quigley is the vice chair of the Business Investment Entities, Partnerships, LLCs and Corporations Committee of the American Bar Association’s Real Property, Trust and Estate Law Section and active in the Chicago Estate Planning Council.
Runtime: 43 minutes

Faculty

Christine Quigley

Christine Quigley

Schiff Hardin LLP

Agenda

Faculty

Christine Quigley

Christine Quigley

Schiff Hardin LLP

  • Partner in the Private Clients, Trusts and Estates group of Schiff Hardin LLP
  • Advises affluent individuals and families in wealth transfer planning, tax planning, estate and trust administration, and business succession planning
  • Chair of the Business Investment Entities, Partnerships, LLCs and Corporations Committee of the American Bar Association’s Real Property, Trust and Estate Law Section and active in the Chicago Estate Planning Council
  • Has been quoted in The Wall Street Journal and has written and lectured on a variety of topics that impact her clients, including carried interest planning, family partnerships, tax traps involved in closely held business transactions and business succession issues
  • Fellow of the American College of Trust and Estate Counsel
  • Has been named a 'Rising Star' by Illinois Super Lawyers magazine each year 2012–2016
  • J.D. degree, summa cum laude, with a certificate in tax law, Loyola University Chicago School of Law; B.A. degree, Dartmouth College
  • Can be contacted at 312-258-5522 or [email protected]

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