Two opinions were issued last year that changed the landscape of valuing pass-through entities (PTE) for transfer tax purposes. These two cases, Estate of Jones v. Commissioner and Kress v. United States, broke with the 20-year-old convention that tax-affecting the earnings of a PTE, such as an S corporation (S corp), partnership and limited liability company, for an assumed corporate tax rate is disallowed when determining such entity’s fair market value (FMV).1
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