How Not To Obtain A Fractional Ownership Valuation Reduction

more+
less-

If more than one person owns a fractional interest in property, the sum of the value of each part may be less than the whole for transfer tax purposes. For example, if Bill and Mary own a parcel of land worth $1,000,000 as 50/50 tenants in common, at Bill’s death his interest is likely to be valued at less than $500,000 to reflect Bill’s lack of control and costs of partition.

In a recent Tax Court case, a decedent during his lifetime transferred 1/5 interests in his ranch to each of his five children. HOWEVER, he retained the “full use, control, income and possession” of the ranch during his lifetime. At his death, his estate sought discounts in value for lack of marketability and control based on the children’s fractional ownership.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

CONNECT

Charles (Chuck) Rubin
Gutter Chaves Josepher Rubin Forman Fleisher P.A.

A tax and business attorney who assists clients in preserving & enhancing individual, family &... View Profile »


Follow Gutter Chaves Josepher Rubin Forman Fleisher P.A.: