The Allowable Discount for Potential Income Tax Liability on Corporate Stock at Death

Abstract

<p>Whatever doubt existed as to the amount of discount allowed on corporate stock at death for built-in capital gains tax liability was largely wiped out with a November, 2007, decision by the Eleventh Circuit Court of Appeals in <em>Estate of Jelke III v. Commissioner</em>.1 That case followed earlier Fifth Court of Appeals decisions in 2001 and 2002 which pioneered the idea that the date of death value of corporate stock was properly discounted, dollar-for-dollar, by the amount of built-in capital gain tax liability.2</p>