Tax Court Dismisses Valuation Expert's Report Due to Conflict of Interest

Abstract

The US Tax Court, on February 22, issued an opinion valuing two paintings for estate tax purposes (Estate of Kollsman v. Commissioner). We reviewed this opinion because the same valuation process would take place in the nonprofit law context (e.g., valuation of property to determine a charitable contribution deduction). The Tax Court found the analysis of the estate's valuation expert “unreliable and unpersuasive” (along with undervaluing the property by $1.77 million) because, in part, he had a “significant conflict of interest that could cause a reasonable person to question his objectivity.”