Ropes & Gray Wins Redstone Estate Tax Case Against the IRS
A team from Ropes & Gray successfully represented the estate of Edward Redstone, the younger brother of American businessman and media magnate Sumner Redstone, in its case against the Internal Revenue Service involving the shares of family-owned theater company, National Amusements Inc.
The IRS had argued that Redstone’s transfer of stock to a trust benefiting his children – part of a 1972 settlement of a family dispute over ownership of shares in National Amusements – was not made in the “ordinary course of business” and found it to be a gift for federal tax purposes.
However, U.S. Tax Court Judge Albert G. Lauber agreed with the Redstone estate and concluded that the transfer “constituted a bona fide, arm’s-length transaction that was free from donative intent and was thus ‘made in the ordinary course of business.’” The U.S. Tax Court’s decision was announced Oct. 26.
The Ropes & Gray team was led by tax & benefits partner Loretta Richard and included tax & benefits associates Brandon Dunn and Daniel Zuckerman. Co-counsel on the case was Howard Castleman of Castleman Law P.C.