When a Buy-Sell Agreement Fails
The Connelly v. IRS case was appealed to the Eighth Circuit, and we find out that Buy-Sell agreements don't mean much when it comes to valuations for estate tax purposes.
The Connelly v. IRS involves two brothers that owned a company. The brother owning 77.18% of the corporate stock passed away. The company had a $3.5 million life insurance policy on his life and it used part of those proceeds to purchase the stock from the estate for $3 million.
The estate valued the stock at $3 million, the IRS challenged it indicating the value should include its share of the life insurance proceeds which increased the estate tax by about $1 million.
We provide an audio webinar with additional details and go over when buy-sell agreements fail to establish a value for estate tax purposes and why you should them periodically.
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