Different values for the same stock in the same estate tax return.

• Author: Josephs, Stuart R.
• Position: Brief Article

In IRS Letter Ruling (TAM) 9403005, at the date of his death, a decedent (D) owned 400 preferred erred and 37,728 common X Corporation shares. The IRS and D's estate agreed on the following values for each share:

Combined Separate block blocks Preferred $1,300 $919.80 Common 13 6.98 The common shares were bequeathed to a credit shelter trust for the benefit of D's spouse and children. The bulk of the preferred shares was bequeathed to the spouse.

The combined block of common and preferred shares constituted a controlling interest in X. The preferred shares passing to the spouse were a minority interest.

The letter ruling held that the control premium attributed to D's total shares in X applied in determining the value of those shares for inclusion in D's gross estate under Sec. 2031. This valuation did not reflect the fact that only a minority interest passed to D's spouse.

On the other hand, the value of this minority interest was differrent purposes of...