Tax Court: Value of Assets Transferred to Partnerships Not Part of Estate

For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

The U.S. Tax Court finds family business assets transferred by decedent to four limited partnerships—with her children serving as limited partners to three of the partnerships—constituted a bona fide sale for full and adequate consideration, therefore the value of the transferred assets is not includable in her estate. IRS contended that, under Internal Revenue Code Section 2036(a), the decedent retained an interest in the transferred assets, therefore the transfers were not bona fide sales for adequate consideration and were includable in her gross estate.