A Huge Taxpayer Win in Favor of Formula Clauses

A recent U.S. Tax Court case (Wandry v. Commissioner, T.C. Memo 2012-88, March 26, 2012) highlights the usefulness of formula clauses in gift transactions. The taxpayers, husband and wife, made gifts to their children and grandchildren of interests in a family limited liability company. Their tax attorney advised them to make all gifts as a …

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Valuation Discounts for Gift of Single-Member LLC Interests

In a split decision by the U.S. Tax Court (Suzanne J. Pierre v. Comm., 133 T.C. No. 2), the court dealt with the issue as to whether a single-member LLC is to be disregarded for transfer tax purposes (i.e., gift tax purposes), thus treating the gift as a direct gift of the underlying property of …

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Family Limited Partnership Failures

We see a lot of tax cases about family limited partnerships (FLPs) and family limited liability companies (FLLCs) that have bad facts that ultimately lead to the loss of any valuation adjustments for estate and gift tax purposes (e.g., discounts for lack of control or lack of marketability). Some of the more common “bad facts” …

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