Wednesday, January 05, 2011

Roger Milliken Avenges Tax on Grandfather's Estate

In 1916, when the federal estate tax was new, Seth Milliken, a co-founder of Milliken & Co., sought to reduce his estate by giving shares of the company to his children. He died in 1920. The IRS insisted the shares were taxable, as gifts in contemplation of death. The legal battle lasted until 1931, when the Supreme Court ruled that the gifts were indeed subject to estate tax.

Last week, Bloomberg reports, Seth's 95-year-old grandson evened the score:

Textile tycoon Roger Milliken ducked the taxman upon his death almost a century after his grandfather lost a landmark legal fight with the U.S. government over sheltering a fortune from the estate tax.

The 95-year-old Milliken, chairman of Milliken & Co., one of the world’s largest closely held textile, chemical, and floor-covering manufacturers, died in a Spartanburg, South Carolina, hospice on Dec. 30, less than 48 hours before a temporarily lapsed federal tax on multimillion-dollar estates was to be reinstated.

Milliken’s fortune now will pass to his heirs with no estate tax.

“The timing of his death surely benefited his heirs and the company,” said Jock Nash, Milliken’s Washington lobbyist on trade issues for 25 years. “His timing was impeccable.”

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