Court Again Considers Estate Tax Implications of an Flp

Download or read book Court Again Considers Estate Tax Implications of an Flp written by Reed W. Easton and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Fifth Circuit in Strangi III upholds the Service's use of Section 2036(a)(1) to attack Family Limited Partnerships ("FLPs") as valuation discount vehicles, but leaves open the question of whether Section 2036(a)(2) may also be used. The prior decision in the Strangi series (Strangi II) overshadowed all former decisions in its expansive interpretation of Section 2036(a)(2). The most recent decision (Strangi III) holds that the transferred assets were properly included under Section 2036(a)(1), and therefore the court did not need to reach the Service's alternative contention under Section 2036(a)(2). Does that foreclose the Service from raising Section 2036(a)(2) in circumstances in which Section 2036(a)(1) or the bona fide sale exception contained in Section 2036(a) do not apply? This article closely analyzes Strangi III in light of the protracted and complex history surrounding this long-awaited decision and identifies possible practitioner responses.