The IRS Has Changed Its Game Plan on Attacking Family Limited Partnerships PDF Download
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Author: David R. Nave
Publisher:
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Category :
Languages : en
Pages : 0
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Book Description
Highlights the unsuccessful efforts by the IRS in challenging valuation discounts associated with gifts of family limited partnership interests. Advises that the IRS's new approach involves the application of Code Section 2036(a) to include the underlying partnership assets in the transferor's estate without any discounts. Summarizes the estate tax inclusion in Code Sec. 2036(a), outlining the three requirements for includability. Focuses on the element of control maintained by the transferor. Reviews a case in which the IRS argued that underlying assets were includible under Code Sec. 2036(a). Analyzes the original Tax Court opinion and second Tax Court opinion after remand from the Fifth Circuit. Addresses the retained enjoyment and retained control aspects of Code Sec. 2036(a), and considers the relevance of the Byrum case relating to transferred stock. Discusses the exception for a bona fide sale for adequate and full consideration. Reviews a district court case which also applied Code Sec. 2036(a) to a family limited partnership transaction. Notes that the taxpayer argued for application of the bona fide sale exception. Offers extensive planning suggestions for avoiding a challenge under Code Sec. 2036(a) to transfers of family limited partnership interests.
Author: David R. Nave
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Highlights the unsuccessful efforts by the IRS in challenging valuation discounts associated with gifts of family limited partnership interests. Advises that the IRS's new approach involves the application of Code Section 2036(a) to include the underlying partnership assets in the transferor's estate without any discounts. Summarizes the estate tax inclusion in Code Sec. 2036(a), outlining the three requirements for includability. Focuses on the element of control maintained by the transferor. Reviews a case in which the IRS argued that underlying assets were includible under Code Sec. 2036(a). Analyzes the original Tax Court opinion and second Tax Court opinion after remand from the Fifth Circuit. Addresses the retained enjoyment and retained control aspects of Code Sec. 2036(a), and considers the relevance of the Byrum case relating to transferred stock. Discusses the exception for a bona fide sale for adequate and full consideration. Reviews a district court case which also applied Code Sec. 2036(a) to a family limited partnership transaction. Notes that the taxpayer argued for application of the bona fide sale exception. Offers extensive planning suggestions for avoiding a challenge under Code Sec. 2036(a) to transfers of family limited partnership interests.
Author: Mitchell M. Gans
Publisher:
ISBN:
Category :
Languages : en
Pages : 23
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Book Description
The IRS has struggled to close down abusive family limited partnerships. At first unreceptive to IRS arguments, the courts eventually embraced section 2036 as an estate-tax tool for attacking such partnerships. Because the section was not designed to apply to partnerships, difficulties have arisen as the courts have struggled with the fit. In its most recent encounter, the Tax Court in Powell grappled with a fit-related issue that implicates the Supreme Court's landmark decision in Byrum. The Powell court, it will be argued, misread Byrum, conflating the majority opinion with the dissent - and converting the rule-based approach adopted by the majority into the standard-based approach advocated by the dissent. The article examines Powell, its reading of Byrum and its struggle with fit-related issues. Before concluding, planning suggestions will be offered.
Author:
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ISBN:
Category : Taxation
Languages : en
Pages : 962
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Book Description
Author: Mitchell M. Gans
Publisher:
ISBN:
Category :
Languages : en
Pages : 17
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Book Description
The IRS has invoked two gift-tax weapons in its attack on family limited partnerships: the gift-on-formation and indirect-gift arguments. While the former argument has thus far not enjoyed any success in the courts, the latter argument has been embraced by the Tax Court and the Eleventh Circuit in Shepherd and by the Eighth Circuit in Senda. Until the Eighth Circuit decision in Senda, taxpayers were able to navigate easily the indirect-gift argument by properly: sequencing the formation of the partnership and the gift of the partnership interest; or reflecting in the parent's capital account his or her contribution to the partnership. The Eighth Circuit has, however, in dicta, suggested that the indirect-gift argument can be applied in conjunction with the step transaction doctrine in order to deny discount. This article explores the partnership-formation process in light of Senda and the Eleventh Circuit's contrary dicta in Shepherd.
Author: Reed W. Easton
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Family Limited Partnerships ("FLPs") and Limited Liability Companies ("LLCs") are commonly used in estate planning to transfer real estate, marketable securities or other assets to family members with valuation discounting used in determining the gift or estate tax consequences. Parents retain control over their assets under the terms of the FLP or LLC agreement while reducing the potential estate tax applicable thereto through the use of valuation discounts attributable to the FLP or LLC interests. Recently, the IRS has been aggressively using Section 2036 in estate tax cases to attack the FLP and LLC strategy for valuation adjustment. A new decision overshadows all the former decisions in its expansive interpretation of Section 2036 (a) (2). This article will look at that decision Estate of A. Strangi TC Memo 2003-145 (May 20, 2003) (i.e. "Strangi II") and identify possible practitioner responses. These possible responses will address current estate planning as well as what the practitioner might do with existing FLPs/LLCs and in the event of a gift or estate tax return examination. Lee Iacocca has been quoted as saying - "We are continually faced by great opportunities brilliantly disguised as insoluable problems." This article is directed to identifying those available opportunities. The FLP/LLC Technique has been around for more than eight years and now the retention of control may avoid any possibility of a valuation discount. Should bad facts be allowed to make bad law? What is the effect of Strangi II on future estate planning? Those parents who already have existing FLPs/LLCs have available alternatives to choose from. What does the new Strangi II decision mean prospectively to the practitioner and his or her clients?
Author: Penny L. Devers
Publisher:
ISBN:
Category : Inheritance and transfer tax
Languages : en
Pages : 48
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Author: Eric L. Stevens J.D.
Publisher: Xlibris Corporation
ISBN: 1664130845
Category : Education
Languages : en
Pages : 154
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Book Description
From the inception of the industrial revolution into our present “nano technology” information age, Wealth and those who have it, continue to proliferate. Ever consider why during our early schools years and later in college we are taught how to be capable employees, but not business owners and wealthy? Calculated design or just an oversight? Is there a “Wealth Game” in progress about which you never received the memo? Many coming into large sums of money, either through hard work, inheritance, or even “instant millionaires” who’ve won hundreds of millions with a lottery ticket, have been unable to keep their earnings; and in the latter’s case, remain a “millionaire.” Why not? And, would their new, millionaire status really mean they were actually “wealthy?” Why is “wealth” obtained and sustained by some, while, obtained and dwindled away by others? Are there Secrets? How do you change from wanting to be “rich,” to desiring to become “truly wealthy?” Is there a difference? What’s the Secret? How do you get wealth? How do you hold on to more of what you earn on your way to wealth? What’s the Secret? “Secrets Of The Wealth Game: What They Hoped You’d Never Find Out,” takes you behind the scenes and into the world of wealth and reveals the secrets of how the “Founding Financial Fathers” in this country obtained and have sustained their wealth through multiple generations. “Secrets Of The Wealth Game” makes their secrets your secrets; reveals their strategies and the financial tools that will enable you to track their footprints to financial success, wealth protection and the ability to sustain both. “to acquire is nothing, to keep is everything” --- The Zurich Group, LLC
Author:
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Category : Estate planning
Languages : en
Pages : 664
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Author:
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ISBN:
Category : Income tax
Languages : en
Pages : 300
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Author: United States. Taxpayer Advocate Service
Publisher:
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Category : Administrative remedies
Languages : en
Pages : 24
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