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Business Valuation News | October 2017

Tax Case Utilizes Formula to Appraise Donated Remainder Interest 

Taxpayer Grossly Overstates Deduction and Penalties Apply

In RERI Holdings I, LLC V. Commissioner, 2017 USTC LEXIS 33 (July 3, 2017) the US Tax Court determined a value of just below $3.5MM for a interest that held a real estate partnership interest.  The taxpayer originally asserted a $33MM deduction.  The Tax Court found a gross overstatement in the deduction and RERI did not have Reasonable Cause defense.  The Tax Court disallowed the deduction and asserted an appraisal penalty.

Click: USTC Opinion