Much ado about Tax Court’s Estate of Adell decision

Estate Adell v. Commissioner, 2014 Tax Ct. Memo LEXIS 155 (Aug. 4, 2014)

Appraisers love a good Tax Court decision, and Estate of Adell meets the definition. This estate tax case has plenty of story elements. At the heart of the long-running dispute between the estate and the IRS was a cable uplinking company that had a sole customer—a very successful religious content provider. The litigants’ values for the company were all over the map, ranging from over $92 million to zero. Both sides changed their positions a few times.

What’s more, five years after developing his original valuation, the estate’s very experienced valuator tried to disavow it and persuade the court to accept a valuation that was much more favorable to the estate because it was based on an entirely different methodology. Where he originally thought the company should be valued as a going concern under an income approach, he later advocated in favor of using an asset approach.

How did the Tax Court sort through the muddle, and did the court get it right? Read more here.