Federal and State Tax Valuation Issues

Accounting and Tax Material

Appeals and Review
Memoranda (ARMs) Revenue Procedures
34 66 - 49
68 77 - 12
FASB Pronouncements and EITF Abstracts
  • Full text, summaries, and status are located at http://www.fasb.org/st/
  • FAS 123R: Share-Based Payment
  • FAS 123: Accounting for Stock-Based Compensation
  • FAS 141: Business Combinations
  • FAS 142: Goodwill and Other Intangible Assets
  • FAS 144: Accounting for the Impairment or Disposal of Long-Lived Assets
  • FAS 157: Fair Value Measurements
  • EITF 98-1: Valuation of Debt Assumed in a Purchase Business Combination
  • EITF 02-5: Definition of "Common Control" in Relation to FASB Statement No. 141
  • FSP (FASB Financial Position) Classification of Options and Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event
  • Fair Value Measurement Project
  • Major Standards Projects and Exposure Documents
Taxation
Revenue Rulings Sections
59-60 338
65-192 341
65-193 1060
68-609 2031
77-287 2036
83-120 2501
83-75 2701
93-12 2702
  2703
  2704
  6659
  6660

Technical Advice Memoranda Private Letter Rulings
9436005 91-50001

Built In Gains

Federal Statutes
  • 1374 Tax imposed on certain built-in gains.
    General rule.  If for any taxable year beginning in the recognition period an S corporation has a net recognized built-in gain there is hereby imposed a tax (computed under subsection (b) ) on the income of such corporation for such taxable year.
Cases
  • Estate of Artemus D. Davis (1998) 110 TC No. 35
    Eisenberg v. Commissioner, 155 F.3d 50, 1998 U.S. App. LEXIS 20109 (2nd Cir. Aug. 18, 1998).
    Estate of Welch v. Commissioner, 2000 U.S. App. LEXIS 3315 (6th Cir. Mar. 1, 2000).
    Estate of Dunn v. Commissioner, 301 F.3d 339, 2002 U.S. App. LEXIS 15453 (5th Cir.
    Aug. 1, 2002)

Charitable Contributions

Federal Statutes

Statutes and Code Sections

§ 170 Charitable, etc., contributions and gifts.

Allowance of deduction.  General rule.  There shall be allowed as a deduction any charitable contribution (as defined in subsection (c) ) payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary.

§ 7520 Valuation tables.

General rule.  For purposes of this title, the value of any annuity, any interest for life or a term of years, or any remainder or reversionary interest shall be determined—(1) under tables prescribed by the Secretary, and (2)by using an interest rate (rounded to the nearest 2/10 ths of 1 percent) equal to 120 percent of the Federal midterm rate in effect under section 1274(d)(1) for the month in which the valuation date falls.

Qualified Appraisal

§ 170 (11) Qualified appraisal and other documentation for certain contributions.
(A) In general.

(i) Denial of deduction. In the case of an individual, partnership, or corporation, no deduction shall be allowed under subsection (a) for any contribution of property for which a deduction of more than $500 is claimed unless such person meets the requirements of subparagraphs (B) , (C) , and (D) , as the case may be, with respect to such contribution.

 (ii) Exceptions.

(I) Readily valued property. Subparagraphs (C) and (D) shall not apply to cash, property described in subsection (e)(1)(B)(iii) or section 1221(a)(1) , publicly traded securities (as defined in section 6050L(a)(2)(B) ), and any qualified vehicle described in paragraph (12)(A)(ii) for which an acknowledgement under paragraph (12)(B)(iii) is provided.

(C) Qualified appraisal for contributions of more than $5,000. In the case of contributions of property for which a deduction of more than $5,000 is claimed, the requirements of this subparagraph are met if the individual, partnership, or corporation obtains a qualified appraisal of such property and attaches to the return for the taxable year in which such contribution is made such information regarding such property and such appraisal as the Secretary may require.

(D) Substantiation for contributions of more than $500,000. In the case of contributions of property for which a deduction of more than $500,000 is claimed, the requirements of this subparagraph are met if the individual, partnership, or corporation attaches to the return for the taxable year a qualified appraisal of such property.

 (E) Qualified appraisal and appraiser. For purposes of this paragraph—

  (i) Qualified appraisal. The term “qualified appraisal means, with respect to any property, an appraisal of such property which—

  (I) is treated for purposes of this paragraph as a qualified appraisal under regulations or other guidance prescribed by the Secretary, and

 (II) is conducted by a qualified appraiser in accordance with generally accepted appraisal standards and any regulations or other guidance prescribed under subclause (I) .

 (ii) Qualified appraiser. Except as provided in clause (iii) , the term “qualified appraiser” means an individual who—

  (I) has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary,

 (II) regularly performs appraisals for which the individual receives compensation, and

 (III) meets such other requirements as may be prescribed by the Secretary in regulations or other guidance.

 (iii) Specific appraisals. An individual shall not be treated as a qualified appraiser with respect to any specific appraisal unless—

  (I) the individual demonstrates verifiable education and experience in valuing the type of property subject to the appraisal, and

 (II) the individual has not been prohibited from practicing before the Internal Revenue Service by the Secretary under section 330(c) of title 31, United States Code , at any time during the 3-year period ending on the date of the appraisal.


Estate and Gift

Florida Statutes
Web Resources

Reasonable Compensation

Cases
  • Mad Auto Wrecking Inc. v. Commissioner, T.C.  Memo 1995-153.

  • Dexsil Corp. v. Commissioner, 147 F.3d 96, 102-03 (2d Cir. 1998)

  • Elliotts, Inc. v. Commissioner, 716 F.2d 1241, 1245-46 (9th Cir. 1983)

  • Rapco, Inc. v. Commissioner , 85 F.3d 950, 954 (2d Cir. 1996)

  • Wechsler & Co., Inc. v. Commissioner (T.C. Memo. 2006-173)

  • John F. Moran v. Commissioner, TC Memo 2005-66


S-Corporations


Stock Options