Cecil v. Commissioner Provides New Insights on Tax-Affecting

How does the court weigh evidence on valuation discounts?

Espen Robak | Apr 20, 2023

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Ever since Gross v. Commissioner,¹ the Tax Court has struggled with the valuation of pass-through entities, such as S corporations (S corps). The question is: Should the earnings of an S corp be tax-affected by imposing an assumed corporate tax rate (based on the taxes of similar C corporations (C corps), for example) to pre-tax earnings and then capitalizing those earnings in some way?

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