Capital gains tax: To discount or not to discount?
Abstract: Courts often struggle with how to interpret statutory fair value in shareholder disputes, including whether to discount business interests for built-in capital gains tax. This article uses a recent oppressed shareholder case, Dawkins v. Hickman Family Corporation, to demonstrate how courts may be persuaded by thorough, credible expert appraisal evidence. In Dawkins, a dollar-for-dollar reduction for capital gains tax was permitted in a shareholder dispute. Citations: Dawkins v. Hickman Family Corporation, 2011 WL 2436537, N.D. Miss., June 13, 2011. Estate of Dunn v. Commissioner, 301 F.3d 351, 5th Cir., 2002.