The IRS Has Changed Its Game Plan on Attacking Family Limited Partnerships

Download or read book The IRS Has Changed Its Game Plan on Attacking Family Limited Partnerships written by David R. Nave and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.