Close Call: Taxpayer Appeals FMV Standard and Discounts in Valuing FLP Restrictions
8th Circuit upholds Tax Court’s decision regarding application of IRC Sec. 2703 to FLP transfer restrictions and their limitation of marketability discounts under the fair market value standard.
Pierre v. Commissioner (II)
Tax Court applies step transaction doctrine to formation and funding of family LLC, and then applies taxpayer’s discounts for lack of control and marketability, in absence of IRS evidence regarding the same.
Ludwick v. Commissioner
Tax Court rejects approaches by both IRS and taxpayer expert for valuing undivided half-interests in vacation home, ultimately concluding combined discount of 17% under weighted, partition and non-partition scenarios.
Holman v. Commissioner (II)
Eighth Circuit upholds Tax Court’s decision regarding application of IRC Sec. 2703 to FLP transfer restrictions and their limitation of marketability discounts under the fair market value standard.
Major Victory for Taxpayer and Appraiser in Classic FLP Case
Taxpayer wins major, multimillion-dollar victory for appraisal of FLP assets in estate tax case, including court’s adoption of substantial discounts for lack of control and lack of marketability.
Another Taxpayer Win: Court Accepts 47.5% Discount for Formed (But Not Funded) FLP
Court accepts combined discounts of 47.5% on transfers to an FLP, which was formed but not fully funded before the founder’s death.
Tax Court Split 9 to 6 on Preserving Family LLC for Gift vs. Income Tax Purposes
In a 9-to-6 split decision, U.S. Tax Court decides that “check-the-box” regulations, which disregard the entity form of a single-member LLC for federal income tax purposes, do not apply to assessments of federal gift taxes.
Murphy v. U.S.
Taxpayer wins major, multi-million dollar victory for appraisal of FLP assets in estate tax case, including court’s adoption of substantial discounts for lack of control and lack of marketability.
New FLP Case: Taxpayer’s First Asset Transfer Merits Discount, But Not Second
Court finds initial transfer of funds to FLP qualifies for exclusion from the estate at discounted value, but second transfer does not, for lack of bona fide business purpose.
Pierre v. Commissioner (I)
In a 9-to-6 split decision, U.S. Tax Court decides that “check-the-box” regulations, which disregard the entity form of a single-member LLC for federal income tax purposes, do not apply to assessments of federal gift taxes.
Keller v. United States (II)
Court accepts combined discounts of 47.5% on transfers to an FLP, which was formed but not fully funded before the founder’s death.
Terrible FLP Facts Preclude Analysis of Discounts
Tax Court finds not one factor supporting a legitimate, nontax business purpose for family limited partnerships funded with over $2 million in largely untraded marketable securities.
Estate of Miller v. Commissioner
Court finds initial transfer of funds to FLP qualifies for exclusion from the estate at discounted value, but second transfer does not, for lack of bona fide business purpose.
New Tax Court Decision on Discounts and Embedded Taxes Hinges on Experts
Tax Court considers determination of discounts for embedded capital gains taxes, lack of control, and lack of marketability for estate’s interests in two closely held companies, one owning primarily farm land and the other marketable securities.
Estate of Jorgensen v. Commissioner
Tax Court finds not one factor supporting a legitimate, nontax business purpose for family limited partnerships funded with over $2 million in largely untraded marketable securities.
Latest FLP Case Lists ‘Bad Facts’ to Avoid
Tax Court disallows FLPs based on numerous bad facts, including poor drafting, delayed funding, and exchange of founder’s interests for a private annuity from the minority owners.
Estate of Litchfield v. Commissioner
Tax Court considers determination of discounts for embedded capital gains taxes, lack of control, and lack of marketability for estate’s interests in two closely held companies, one owning primarily farm land and the other marketable securities.
Estate of Hurford v. Commissioner
Tax Court disallows FLPs based on numerous bad facts, including poor drafting, delayed funding, and exchange of founder’s interests for a private annuity from the minority owners.
IRS and Taxpayer Agree to 35% DLOM—If FLP Transfers Pass ‘Indirect Gift’ Tests
Tax Court accepts stipulated 35% DLOM after finding that FLP funding and transfer is not an indirect gift.
Bianca Gross v. Commissioner
Tax Court accepts stipulated 35% DLOM after finding that FLP funding and transfer is not an indirect gift.
In re Buonamici
IN THE COURT OF CHANCERY FOR THE STATE OF DELAWARE IN THE MATTER OF ) TIMOTHY BUONAMICI, JR. ) C.M. No. 04116-N-VCP MEMORANDUM OPINION Date Submitted: April 1, 2008 Dated Decided: August 11, 2008 James F. Harker, Esquire, COHEN SEGLIAS PALLAS GREENHALL & FURMAN, P.C., Wilmington, Delaware, Attorney for Petitioner Gary A. Bryde, Esquire, GARY A. BRYDE, P.A., Hockessin, Delaware, Attorney for Guardian PARSONS, Vice Chancellor. This matter is before me on exceptions to ...
Tax Court Takes Novel Approach to DLOM Holding Period in Holman
U.S. Tax Court takes an unusual approach to DLOM, holding periods, in attack on family limited partnership.
Holman v. Commissioner (I)
U.S. Tax Court takes an unusual approach to DLOM, holding periods, in attack on family limited partnership.
Can You Take it With You? State Supreme Court
Kansas Supreme Court revisits Family Limited Partnership discounts case, and offers "contours of guidance."
Another Bad Facts FLP—and Why Appraisers Should Care
What appraisers should know about another "bad facts" FLP.