Post-Death Actions of Foundation Affecting Estate Tax Value

From: Halperin, Alan S Sent: 7/2/2014 10:51:32 AM To: jeffrey E. [[email protected]] Subject: Post-Death Actions of Foundation Affecting Estate Tax Value Attachments: image001.png; image002.png; image003.png; image004.png; image005.png | thought of you when | read this article. Was this your idea? Alan WALL STREET Texas Billionaire's Heirs Save Some Money on Taxes 10Jun 27, 2014 1:26 PM EDT By Matt Levine e a ° A Every so often I hear a story that I find rather wonderful, and that I then pass along to you, just in case you and I share a similar sense of wonder. Here is one of those stories. It's about death and taxes. The story begins on Dec. 28 of last year, when a Dallas billionaire named Harold Simmons died at the age of 82. He left the bulk of his $8 billion fortune to two of his daughters. Much of that fortune was in "Contran Corp., a closely held entity that holds majority stakes in four publicly traded companies: Valhi Inc., NL Industries Inc., Kronos Worldwide Inc. and Comp X International Inc." The biggest chunk of the estate was Contran's 93.8 percent stake in Valhi, which was 318,156,746 shares. ! Valhi's stock closed on Dec. 27, 2013, at $14.91 per share, making that stake worth about $4.7 billion as of Simmons's death. Another 2,481,900 Valhi shares (0.7 percent, $37 million) were held by the Harold Simmons Foundation, a charity controlled by Simmons's daughters.’ Other family members owned about 2.8 million shares ($41 million). Public shareholders owned about 15.7 million shares ($234 million).* Here are two facts about the federal estate tax: e The estate tax rate for 2013 and 2014 is 40 percent of the value of the estate.* e The executor can choose to determine the value of the estate either on the date of death, or on the "alternate valuation date," which is the date six months after the date of death.° For Harold Simmons's estate, that alternate valuation date is tomorrow -- six months from his death. Today is the last trading day before that valuation. How's Valhi done in the last six months? HOUSE_OVERSIGHT_029344