Intergenerational Split Dollar – Cahill Case Settled – Taxpayer Concedes on Split Dollar Valuation Issue

The Cahill intergenerational split dollar case received a lot of attention in June when the Tax Court denied the taxpayer’s request for partial summary judgement. In the taxpayer’s petition for partial summary judgment he requested the Court hold that IRC Sections 2036, 2038 and 2703 should not apply to the valuation of the split dollar receivable. The taxpayer had claimed a 98% discount on the value of that receivable. The Tax Court ruled that these three Code Sections could apply to the valuation. The tone of the Tax Court opinion was not favorable to the Cahill estate. Now, only two months later, the Cahill Estate has settled with the IRS and conceded in full on the split dollar valuation issue.

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