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Buchanan Ingersoll & Rooney Tax Counsel Deborah M. Beers was recently interviewed by Tax Analysts, a nonprofit corporation that publishes a variety of tax magazines, books and other resources for tax professionals. The article Beers appeared in, titled “Appeals Court Reverse Art Valuation Decision,” discusses the Tax Court’s recent decision on a collector’s interested in an art collection valued at over $35 million. In Estate of James A. Elkins Jr. v. Commissioner, 140 T.C. No. 5 (2013), the Fifth Circuit ordered the IRS to refund the estate $14.4 million for taxes overpaid, a minimal 10 percent discount.

Beers tells the publication that the “Tax Court simply accepted the IRS’s assertions and then decided to allow a 10 percent discount with no real evidence to support that rate.”

“The trial court seemed to base its assessment on the assumption that the decedent's children would be the likely buyers based on their sentimental and emotional ties to the art. However, the test should involve hypothetical buyers and sellers, not actual parties,” Beers continues.

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