Giustina Decision Reversed and Remanded for Recalculation
According to the Ninth Circuit, the answer to the question above is “Absolutely.” This case involved a limited partnership owning timberlands that was formed 15 years prior to Mr. Natale B. Giustina’s death. After the family’s lumber mills were sold, timberlands owned for decades within the family’s business entities were transferred to a new partnership in order to effect a family ownership and management restructuring. The timberlands continued to be held and managed by the partnership and there was no desire or intention to liquidate these assets at the time of Mr. Giustina’s death. In Tax Court, Judge Morrison opined that 25% weight ought to be given to the liquidation value of the partnership, and 75% weight ought to be given to its going concern value, which was determined through a capitalization of cash flow method.