The U.S. Court of Appeals for the Eleventh Circuit recently affirmed a Tax Court’s ruling regarding a discount for lack of control and lack of marketability.1 The Tax Court had rejected an estate’s expert’s 31.7 percent discount conclusion and agreed with the Internal Revenue Service’s expert that the decedent’s 46.94 percent interest in Central Investment Corp.’s (CIC) voting shares and 51.5 percent interest CIC’s non-voting shares should be subject to a 7.5 percent combined discount for lack of control and lack of marketability.2 Further, the court determined that, because of the liquid nature of CIC’s investments, no interest deduction could be made for interest on a loan that raised funds to pay for tax liabilities and administration expenses.
Source: Eleventh Circuit Limits Valuation Discounts
