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Wandering Far Afield With Defined Value Clauses, Wendy G. Gerzog
Wandering Far Afield With Defined Value Clauses, Wendy G. Gerzog
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The Wandry decision extends the application of defined value clauses beyond those family limited partnership cases that transfer any excess value to a charity. In Wandry, the Tax Court reads Procter narrowly and ignores the fundamental rationale of Robinette.
Defined Value Clauses And Fair Market Value, Wendy G. Gerzog
Defined Value Clauses And Fair Market Value, Wendy G. Gerzog
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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.