Defined Value Clauses and Fair Market Value
Wendy C. Gerzog
University of Baltimore - School of Law
March 26, 2012
Tax Notes, Vol. 134, No. 13, p. 1685, March 2012
University of Baltimore School of Law Legal Studies Research Paper
In Hendrix the Tax Court considered the issues of whether defined value clauses were the result of arm’s-length transactions and whether they were void as against public policy. The underlying dispute was whether the taxpayers’ transfers of the John H. Hendrix Co. stock were valued at fair market value. With a decision favoring the taxpayers, the defined value clauses in both McCord and Hendrix impede the accurate valuation of taxable gifts to family members and of deductible charitable gifts.
Number of Pages in PDF File: 4
Keywords: defined value clause, family LLC, FLP, fair market value, gift tax, Hendrix, Procter, McCord, charitable gift, American Bar EndowmentAccepted Paper Series
Date posted: March 27, 2012
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