Estate of Kelley v. Commissioner
United States Tax Court
T.C.M. 2005-235 (2005)
- Written by Eric Miller, JD
Facts
Prior to his death, Webster Kelley held a 94.83 percent interest in a family limited partnership (FLP)—that is, a limited partnership whose interests are owned by members of the same family. Kelley’s estate (plaintiff) hired Appraisal Technologies, Inc. (ATI) to prepare a valuation of Kelley’s interests in the FLP. ATI recommended a valuation discount of 53.3 percent to reflect a prospective buyer’s lack of control over Kelley’s assets pursuant to the partnership agreement as well as the difficulty of marketing the assets in their FLP form. The Internal Revenue Service commissioner (defendant) assessed a much lower discount of 25.2 percent, which the estate challenged in the United States Tax Court.
Rule of Law
Issue
Holding and Reasoning (Vasquez, J.)
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