This article explores a "recurring issue of asset valuation for estate tax purposes," which the Eleventh Circuit purported to resolve in Estate of Blount v. Commissioner. The broad question is how one should value a decedent's shares in a corporation where those shares are subject to a buysell agreement that is either: (1) disregarded for estate tax purposes, or (2) omits the price of the shares it covers. The specific issue is how one should account for insurance proceeds a corporation receives on account of a decedent's death when those proceeds are offset by a corresponding obligation to redeem the decedent's shares. The article concludes that courts should eschew following Estate of Blount. The author suggests that if Congress were concerned about the perceived injustice of including life insurance proceeds in corporate value, it could choose to make a specific exception for life insurance proceeds and redemption obligations.
Adam S. Chodorow,
Valuing Corporations for Estate Tax Purposes: A Blount Reappraisal,
3 Hastings Bus. L.J. 1
Available at: https://repository.uchastings.edu/hastings_business_law_journal/vol3/iss1/1