09 / January 2015

Bogdanski sums up 2014 valuation activity in U.S. Tax Court

Posted in: Business Valuation Law News Written by: Sylvia Golden
Categories: case law analysis estate and gift taxation federal taxation goodwill tax valuations valuation experts valuation method
Tags: appraisal bogdanski business valuation business valuation resources cavallaro v. commissioner commercial goodwill corporate tax estate of adell estate tax federal taxation gift tax goodwill intangible

After spending resources on other issues, the U.S. Tax Court turned its attention back to valuation cases, said Prof. John A. Bodganski (Lewis & Clark Law School) at the start of his recent BVR webinar, Business Valuation in the Federal Tax System in 2014.

Bogdanski, a longtime observer of the Tax Court, even detected a theme running through at least three of the 2014 cases. It’s how to account for the ownership of goodwill or similar intangibles in an appraisal. The Tax Court confronted the issue in different contexts in Estate of Adell, Cavallaro, and Bross Trucking, but Bogdanski doesn’t believe the court dug deep enough in reaching a decision.

Particularly in Adell and Bross Trucking, cases that were decided by Judge Paris, there are sound counterarguments to the court’s reasoning, Bogdanski says. The losing party—the IRS, in both instances—should have been more forceful in defending its position.

To find out how the agency could have pushed back, click here.

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