Taxpayer victory in the battle over built-in capital gains tax
Abstract: Built-in capital gains tax is an economic reality for C corporations. Recent Tax Court rulings have forced the IRS to concede that hypothetical investors consider imbedded tax liabilities when buying and selling C corporations. This article discusses a recent case, Estate of Jelke v. Commissioner, which provides an example of the ongoing debate as to whether valuators should apply dollar-for-dollar or discounted reductions for built-in capital gains tax liabilities. Citations: Estate of Jelke v. Commissioner, U.S. Court of Appeals for the 11th Circuit, No. 05-15549, Nov. 15, 2007. Estate of Davis v. Commissioner, 110 T.C. 530, 1998. Estate of Eisenberg v. Commissioner, 155 F.3d. 50, 57, 2d. Cir., 1998. Estate of Jameson v. Commissioner, 267 F.3d. 50, 57, 2d Cir., 1998. Estate of Dunn, 301 F.3d. 339, 5th Cir., 2002.