Tax Court writes new chapter in ongoing saga of “tax affecting”

Description

Abstract: In Estate of Cecil v. Commissioner, the U.S. Tax Court opined on whether “tax affecting” is appropriate when valuing noncontrolling, nonmarketable interests in pass-through entities using the income approach. This article summarizes the debate over tax affecting and why the court accepted tax affecting in this case. Estate of Cecil v. Commissioner, T.C. Memo 2023-24. Gross v. Commissioner, T.C. Memo. 1999-254, aff’d. 272 F. 3d 333 (6th Cir. 2001), cert. denied, 537 U.S. 827 (2002). Estate of Jones v. Commissioner, T.C. Memo. 2019-101.