Post-Death Action Reduced Amount of Estate Tax Charitable Deduction

Decedent died and left a majority stake in a real property management corporation to a private foundation. The estate tax value of the stock was $14.182M.

After the decedent’s death, but before the stock was transferred to the foundation, certain things happened, including:

a. The corporation elected Subchapter S status;

b. The corporation redeemed from the decedent’s trust a large portion of the company shares for a value far less than the estate tax value.

At least part of the difference in value was attributed to changes in business climate after the date of death and before the 7th month date after death when the stock was appraised for the redemption. The Tax Court, however, found that there was insufficient evidence to support the large decrease in value. There was also concern that the redemption price was calculated on a minority basis even though the decedent owned a majority interest…

Estate of Victoria E. Dieringer, et al., 146 T.C. No. 8

A boutique law firm with a practice limited to

tax, estate planning, probate, trust & guardianship law and litigation, and related commercial matters