After a more than 20-year debate regarding tax affecting, the U.S. Tax Court recently sided with the taxpayer in the case of Estate of Cecil v. Commissioner (Cecil) in its March 2023 ruling. Since 1999, the Tax Court, IRS, taxpayers, and appraisers have been challenged with the question of whether it is appropriate to apply an entity-level corporate income tax to an S corporation in determining value. As tax affecting is commonly accepted and performed in the appraisal practice in a variety of areas, this recent court ruling is welcome news for taxpayers and appraisers alike.

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