Tax Court Case SummaryEstate of John F. Koons III vs. Commissioner

On April 8, 2013, the United States Tax Court issued Tax Court Memorandum 2013-94, Estate of John F. Koons III vs. Commissioner of Internal Revenue (“Koons”).

The estate’s expert, Dr. Mukesh Bajaj determined that a 31.7% discount was appropriate for a 47% voting interest in the cash-rich holding company. However, there were questions as to if the 47% voting interest in a limited liability company would be deemed a controlling interest. After reviewing the facts, the Tax Court deemed that the interest ultimately increased to more than 70% after certain redemptions were agreed to by members of the limited liability company, before date of death, but ultimately completed after the date of death.