Conrad Janis Maria G. Janis v. Commissioner of Internal Revenue

Conrad Janis and his wife Maria G. Janis (“Petitioners”) appeal the Tax Court’s holding that they are liable for deficiencies in their joint income tax returns from 1995 through 1997. These deficiencies resulted from Conrad taking inconsistent positions as to the value of an expensive art collection included in his-father’s estate. • On the premise that flooding the market with a large collection of works from significant artists, ranging from Piet Mondrian to Jean Arp and Grandma Moses, would depress the value of the works, Conrad and his brother Carroll Janis, as co-executors and the sole beneficiaries of the estate, calculated a discounted value for the collection. Conrad and Carroll ultimately agreed with the Internal Revenue Service (“IRS”) on a discounted valuation of the collection. Some years later, in valuing the gallery’s inventory, Petitioners claimed a higher, undiscounted market value as the tax basis for the collection in their joint tax returns. The Tax Court held that Petitioners were bound by the duty of consis tency and could not report on their individual tax returns a value different than that stipulated to for the estate tax return. We agree and…