Family Limited Partnerships

This section includes guidance on tax issues related to family limited partnerships.

Guide on Valuation Discounts for Estate and Gift Taxes This is an article/guide regarding discounts. Learn More>> HR 436 - Pomeroy Estate Tax Reform Bill Regarding Elimination of Discounts on Non Actively Traded Business This is the bill proposed by Rep. Pomeroy on January 9, 2009 regarding discounts. Learn More>> March 20, 2009 AICPA Comments on HR 436 - Pomeroy Estate Tax Reform Bill Regarding Elimination of  Discounts on Non Actively Traded Business This is AICPA comments on the bill proposed by Rep. Pomeroy on January 9, 2009 regarding discounts. Learn More>> AICPA Checklist on Family Limited Partnerships Updated for 2007, this guide contains a checklist of issues to consider in yearly administration of Family Limited Partnerships. Learn More>>   IRS Appeals Settlement Guidelines on FLPs and FLLCs These IRS appeals settlement guidelines - with IRS and taxpayer positions and discussions - on family limited partnerships (FLPs) and family limited liability corporations (LLCs).  Practitioners with clients who have FLPs and LLCs should take a look at these IRS settlement guidelines and be aware that the IRS will be taking the positions mentioned in the guidelines. Learn More>>

Using Family Partnerships and Refuting IRS Challenges This article intends to highlight the AICPA's position concerning the legitimate use of family partnerships. In particular, the AICPA takes exception with the Internal Revenue Service's refusal to recognize for transfer tax purposes the validity of many family partnership's under examination. Learn More>>   Defined Value Gifts at the Crossroads This article on family limited partnerships (FLPs) and defined-value gifts covers the McCord case. Learn More>>

Guide to Avoiding the Indirect Gift Trap with Family Limited Partnerships Taxpayers and their advisers have gotten increasingly careless about following the proper creation and administration procedures for FLPs. This failure to respect the form of the transaction has led to IRS victories in attacking FLPs, including the successful application of the indirect gift rule to asset transfers to a FLP. Learn More>>

Tax Court Allows 35 Percent Combined Discount for FLP The Tax Court determined the fair market value of a decedent's interest in an FLP based solely on section 2031, with IRS conceding on section 2036. Learn More>>

Taxpayer Wins LLC Valuation Case In a win for the taxpayer in a limited liability company (LLC) valuation case, a U.S. district court held that the IRS erred in revaluing a decedent's minority ownership interest in four limited liability companies. Learn More>>

Another Family Limited Partnership (FLP) Case This article discusses the Korby cases, in which the court found that an implied agreement to retain enjoyment of income results in assets transferred to an FLP being included in the estate. Learn More>>

Brief Update on FLP Cases Over the Spring and Summer 2005 This article highlights several family limited partnership (FLP) cases that were decided during the spring/summer of 2005. It also notes the AICPA FLP Administration checklist that is available to assist members in this area. Learn More>>

Fifth Circuit Affirms Tax Court Decision in Strangi that Sec. 2036(a)(1) Applied In Strangi, the Fifth Circuit affirmed the Tax Court decision that the assets transferred to a family limited partnership (FLP) were includible in the estate under Section 2036(a)(1). This article notes some of the issues the Court considered. Learn More>>

Another FLP Case—First Circuit Affirms Tax Court in Estate of Abraham The First Circuit affirmed the Tax Court, holding that the value of property transferred on behalf of an incapacitated individual under court supervision to three family limited partnerships (FLPs) was includible in her gross estate. Learn More>>

FLP Planning after Strangi, Kimbell and Thompson This article discusses family limited partnership cases, their importance, the practitioner community's response, and actions to take while awaiting the results of the Strangi settlement. Learn More>>

My Favorite Planning Ideas That I Like to Talk About This article contains estate planning ideas that were presented at the AICPA National Conference on Federal Taxes on November 2, 2004. Learn More>>

Entity Valuation Issues and Cases Update This article contains the Entity Valuation Issues and Cases Update presentation from the November 1, 2004, AICPA Annual Federal Tax Conference. Learn More>>

The Art of Making Uncle Sam Your Assignee Instead of Your Senior Partner: The Use of Partnerships in Estate Planning This outline, updated through October 18, 2004, examines the use of limited partnerships in connection with estate planning. Learn More>>

The Impact of Income Taxes on Valuing S Corporation Stock On November 19, 2001, a split Sixth Circuit upheld a Tax Court decision that shareholders must value their S stock without tax affecting the S corporation's income. Learn More>>

Tax Court Expansion of 2036(a) in Bongard Goes too Far Agreeing with the dissent, this article contends that a divided Tax Court wrongly expanded the application of section 2036(a) when it found that transferred shares did not meet the bona fide sale exception and were includable in the decedent's estate. Learn More>>