Opinion ID: 1708276
Heading Depth: 1
Heading Rank: 6

Heading: Avoidable Tax

Text: McGladrey's next alleged error is that Lien failed to prove that the additional tax was avoidable. Once again, whether Lien successfully proved that the tax was avoidable is a question of fact, for the trier of fact, the jury. See Rockler, 273 N.W.2d at 650 (whether client established damages is a finding of fact). Lien's expert witness (whom McGladrey classifies as a non-tax expert) testified that had Lien held his preferred stock until 1991, he would have been able to deduct his $240,000 preferred stock as part of the [tax] basis against his proceeds, and would not have suffered any damages. McGladrey's own expert witness (whom McGladrey classifies as a tax expert), when asked whether this tax that was imposed could have been avoided in any event testified that once the redemption took place, it's highly unlikely that anything could have been done to eliminate that tax obligation. McGladrey's expert further testified that if the jury determined that Lien had asked for and received tax advice which resulted in the redemption of the preferred stock, the conduct of McGladrey did not meet professional standards and he placed damages at approximately $75,000. Whether Lien failed to provide an opinion from a tax expert regarding the issue of whether a tax was paid which could have been avoided, is immaterial because the jury could reasonably conclude that McGladrey provided one. Our review of the record indicates sufficient evidence upon which the jury could determine that, absent McGladrey's negligence, Lien would not have incurred the additional tax. McGladrey has failed to show otherwise. Therefore, the damages sustained would be final but for the following alleged error.