Case Summaries Grieve v. Commissioner – Tax Court Rejects IRS Gift Tax Valuation Approach

Ronald D. Aucutt

Mar 23, 2020

The opinion of Tax Court Judge Kerrigan in Grieve, regarding the gift tax value of 99.8% nonvoting interests in LLCs holding largely marketable assets, represents a significant taxpayer victory on challenging facts. The IRS attempted in effect to ignore the LLCs by valuing the noncontrolling interest as if either a willing seller or a willing buyer or both would attempt to combine it with the 0.2% voting interest for purposes of any sale. The court rejected that approach as requiring the indulgence of “imaginary scenarios” and accepted the values that had been reported on the donor’s gift tax return.

Senior Fiduciary Counsel
Ron is responsible for working with clients and their advisors to develop practical and efficient wealth transfer plans, and for guiding the firm on fiduciary issues.