Valuing Pass-Through Entities

About the Website

This book includes a companion website that can be accessed at www.wiley.com/go/valuingptes (password: barr123). Here you will find the Appendix A Checklist included in the book, along with seven key cases referenced in the text that have significantly influenced pass-through entity valuation theory.

The text of these seven cases can be accessed on the companion website:

1. Gross v. Commissioner

   T.C.M. 1999–254, 78 T.C.M. (CCH) 201, T.C.M. (RIA) para. 99,254, 1999 Tax Ct. LEXIS 290 (July 29, 1999). The U.S. Court of Appeals affirmed the decision of the Tax Court, 272 F.3d 333 (6th Cir. 2001).

   This case involved the fair market valuation of 1992 gifts of less than 1 percent of the common stock (a noncontrolling interest) of an S corporation that was highly profitable and distributed nearly all of the company's income to its shareholders. The company's shareholders' agreement contained restrictions on transfers and prohibitions on terminating the S election. There was no mention of any expectation to sell the business or terminate the S election of the subject company. In its 1999 decision, the tax court applied a 0 percent tax-affecting adjustment when applying the income approach; this decision was affirmed by the U.S. Court of Appeals in 2001.

2. Estate of Heck v. Commissioner

   T.C.M. 2002–34, 83 T.C.M. (CCH) 1181, T.C.M. (RIA) para. 54,639, 2002 Tax Ct. LEXIS 38 (Feb. 5, 2002).

   This case involved the 1995 estate tax fair market valuation of a 39.6 percent noncontrolling ...