In Reri Holdings I v. CIR, the Tax Court held that an appraisal of the asset held by a disregarded entity LLC was sufficient for income tax charitable deduction purposes when the charitable contribution was a transfer of the 100% member interest in the disregarded entity. It did note, however, that this may not be the case if for instance there had been an external transfer restriction that applies to a successor owner of the LLC interest, which does not apply directly to the asset of the LLC. In such a case it may be more appropriate to value the interest in the disregarded entity instead of the underlying asset.

See Reri Holdings I, LLC v. CIR, 143 TC No. 3, August 11, 2014

Posted by Theodore H. Waggner, Associate Editor, Wealth Strategies Journal