A recent U.S. Supreme Court ruling resolves a circuit split on a business valuation issue — and it could have a major impact on the value of many closely held companies going forward. In Connelly v. IRS (144 S. Ct. 1406, 2024), the Court held that corporate-owned life insurance (COLI) designed to fund the redemption of a deceased shareholder’s stock under a buy-sell agreement should be considered a corporate asset when calculating the value of the decedent’s shares for purposes of the federal estate tax. Here’s a summary of the case and how it may affect owners of other private companies. IRS challenges estate’s valuation Two brothers co-owned a building supply company. They entered into a buy-sell agreement to ensure that the business remained in the family if...