Tax Analysts provides news, analysis, and commentary on tax-related topics, including the latest developments affecting treatment of appraisals and valuations.
Appraisals and valuations may well be one of the most fact-based and disputed areas of tax law. What is the value of the easement/the artwork/the real estate that was donated? Often the donor says one thing, the IRS says another, and the court decides a third. ("Fifth Circuit Finds Tax Court Erred in Valuing Art Interests" (Estate of Elkins et al. v. Commissioner)) Such differences of opinion can extend to any item that needs to have a value attached for tax purposes. ("Ninth Circuit Reverses Tax Court Valuation of Partnership Interest" (Estate of Giustina v. Commissioner))
Because of the variations in outcomes, valuation questions are a perennial topic for commentary and analysis. ("Estate of Richmond: A Flawed Approach to Valuing a BIG Discount," "Why House Burning Cases Are Still Smoldering," "A Better Way to Encourage Gifts of Conservation Easements")
Appraisal and valuation issues even have a different format of fact-finding. William Davis recently covered concurrent witness testimony in the Tax Court in his article “Tax Court Judge Laro Advocates for Hot Tubbing.”
The IRS has released internal guidance on these topics in the form of “job aid” documents: intended to assist IRS employees on topics related to valuations: reasonable compensation determinations, noncontrolling interest valuations, and discounts for lack of marketability.
Tax Analysts consistently and promptly publishes all relevant developments regarding taxation of appraisals and valuations.
