Taxpayer Win: Court Accepts 47.5% discount for formed, but not funded, FLP

Keller v. United States, 2009 WL 2601611 (S.D.Tex.) With the aid of longtime financial and legal advisors, a wealthy Texas widow established a family limited partnership (FLP), to be funded with $250 million in corporate investment bonds. She wanted to protect the family’s wealth, so she set up a limited liability company as the .1% general partner (GP), intending to fund it with $300,000 from her personal accounts. The limited partners (LPs) would consist of two family trusts, each holding a 49.95% interest. Initially, she would own all of the GP, transferring her interests to family members after her death.