Discussion:Discounting the value of real property in an estate to account for built-in capital gains

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{{ForumReplyPost|UserID=Kevinh5|Date=5 November 2009|Text=Taylor, if 1014 applies, why do you think there are any 'built in capital gains'?}} {{ForumReplyPost|UserID=Kevinh5|Date=5 November 2009|Text=Taylor, if 1014 applies, why do you think there are any 'built in capital gains'?}}
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Revision as of 18:07, 5 November 2009

Discussion Forum Index --> Advanced Tax Questions --> Discounting the value of real property in an estate to account for built-in capital gains
Discussion Forum Index --> Tax Questions --> Discounting the value of real property in an estate to account for built-in capital gains

Twoodbury (talk|edits) said:

5 November 2009
Can I discount the value of real property held by an estate to account for built in capital gains?

We are currently in the process of valuing an estate that consists primarily of ownership interests in partnerships owning commercial real estate assets. Many of these assets have been owned by the decedent for 10-30 years. We are currently having discount studies prepared to account for lack of marketability and lack of control discounts.

In researching another issue, I came across a body of tax law (Estate of Jelke III v. Comr., 507 F.3d 1317(11th Cir. 2007)) that referred to a dollar for dollar discount available for holders of stock in C-corporations to account for the capital gains tax liability on the date of death. I would like to apply this logic to my situation and discount the value of the real property in the estate by capital gains liability.

I'm having trouble tracking down precedent for doing this.

Twoodbury 11:15, 5 November 2009 (CST)

Kevinh5 (talk|edits) said:

5 November 2009
Taylor, if 1014 applies, why do you think there are any 'built in capital gains'?

Kevinh5 (talk|edits) said:

5 November 2009
(In Jelke, the corporation was a holding company, the investment holdings having built in gains)
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