In a recent Tax Court decision, Harry H. Falk, and Steven P. Heller, Co-Executors, v. Commissioner of the Internal Revenue, the United States Tax Court ruled that in the case of the Madoff Ponzi scheme, an estate which paid estate tax on Madoff assets which subsequently have become worthless can claim a theft deduction.
James Heller, a New York state decedent, died in January 2008 owning a 99% interest in James Heller Family, LLC (the “LLC”). The only asset held by the LLC was an account with Bernard L. Madoff Investment Securities, LLC. In November of 2008, the Executors of Mr. Heller’s estate withdrew some money from the LLC’s Madoff account in order to pay estate taxes and other administrative expenses. Shortly thereafter, the news of the Madoff Ponzi scheme became public. Suddenly, the LLC’s interest and the estate’s interest in the LLC became worthless.
Arthur H. Geffen
Attorney & Counselor at Law
1620 East Beltline Road
Carrollton, TX 75006
972-242-8887
972-446-7976 fax
https://www.dallasestateattorney.com
Business Organizations, Tax, Estates & Trusts, Probate
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