Elkins Decision Overturned by the Fifth Circuit

In March 2013, the Tax Court rendered its opinion as to the fair market values of undivided fractional interests in 64 works of modern and contemporary art includable in the Estate of James A. Elkins, Jr. (the “Estate”). During trial, the Tax Court was presented with testimony offered by the Estate’s experts that appropriate discounts for the fractional interests in art should range from approximately 50% to nearly 80%.1 Such testimony was in stark contrast to the position taken by the Commissioner, who did not believe any fractional interest discount was appropriate. Confident in its position, the Commissioner called only rebuttal witnesses during trial.