Taxpayers Win Built-in-Gains Case

A summary of Jensen v. Comm’r, TC Memo 2010-182, provided by Pluris Valuation Advisors LLC, is below:

The Tax Court’s decision in Jensen v. Comm’r, just released Tuesday, is a significant win for taxpayers and should be of interest to estate planners and their clients. The IRS has had a string of losses on the Built-in-Gains (BIG) tax issue since the Eisenberg and Davis decisions in 1998. But a discount in the full “dollar-for-dollar” amount of the BIG tax is not always allowed.

In this case, the Service’s analysis of the issue was poorly supported, and the Court accordingly rejected the Service’s opinion that the discount should only be a fraction of the BIG tax. The implications for future estate planning valuations are discussed in our review and analysis of the Jensen decision.

For an in-depth review of Jensen, see Ori Bash & David A. Gaynor II, Estate of Jensen Gets the Full BIG Discount, Pluris Valuation Advisors LLC.