High Court Signals Doubt Over Estate Insurance Tax Treatment (1)

US Supreme Court justices appeared skeptical of an estate’s bid to challenge its $1 million tax deficiency on the grounds that the IRS overvalued the decedent’s redeemed stock.

Upholding the estate’s tax bill could impede a business’s ability to remain closely held and prompt widespread review of succession plans for greater tax risk, estate planners say. The IRS argues letting the estate off the hook would create an undue windfall for its executor, Thomas Connelly, and the potential for future tax abuse.

“It seems the fundamental problem with your approach is that Thomas’s asset has quadrupled in value,” Justice ...