CUT Method Prevails in Amazon’s Transfer Pricing War with IRS

by Royer Advisors | Dec 11, 2024 | Court Rulings, Valuations

Amazon.com, Inc. v. Commissioner Amazon scored a win against the Internal Revenue Service in a transfer pricing case. The dispute was over the calculation of buy-in payments to compensate Amazon US for the transfer of a group of intangibles to the company’s European...

Eleventh Circuit Affirms Tax Court’s Valuation of Trust’s Interest in LLC

by Royer Advisors | Dec 11, 2024 | Court Rulings, Valuations

Estate of Koons v. Commissioner (Koons II)  The 11th Circuit Court of Appeals upheld a 2013 Tax Court ruling in an estate and generation-skipping tax case that centered on the fair market value of a revocable trust’s interest in an LLC. The crux of the valuation was...

Improper Use of Active/Passive Framework Skewers Valuation

by Royer Advisors | Dec 11, 2024 | Court Rulings, Valuations

Bair v. Bair  When confronted with quantifying the appreciation of non-marital property, it is common for valuators first to classify the change in value as “active” or “passive” and then do the valuation. A Florida case shows that, when applied prematurely, this...

In Controversial Move, Tax Court Tackles ‘Double Inclusion’ Problem 

by Royer Advisors | Dec 11, 2024 | Court Rulings, Valuations

Estate of Powell v. Commissioner  Given the unfavorable optics of a recent case, the Tax Court’s finding that the value of assets transferred from the decedent to a family limited partnership was includible in the value of the decedent’s gross estate is not...

Tax Court’s Valuation of Trust’s Interest in LLC Weathers Appeal

by Royer Advisors | Dec 11, 2024 | Court Rulings, Valuations

Estate of Koons v. Commissioner (Koons II), The 11th Circuit Court of Appeals upheld a 2013 Tax Court ruling involving a revocable trust’s interest in a limited partnership. The valuation turned on the marketability discount. The 11th Circuit opinion shows the Tax...

Inadequate ESOP Valuation Vetting Gets Trustee Into Hot Water

by Royer Advisors | Dec 11, 2024 | Valuations

Brundle v. Wilmington Trust N.A. The case involved a short-lived ESOP whose structure was unusual in that the sellers—the principal shareholders in a private security firm—agreed to sell 90% of their shares to the ESOP and exchange the remaining 10% for warrants. The...