A deeply divided Tax Court yesterday handed the IRS a significant setback in allowing the taxpayer to claim substantial discounts for lack of marketability and control on the transfer of cash and marketable securities to a single member LLC followed by transfers from the LLC to trusts established for the benefit of her son and granddaughter. The 10-judge majority opinion (by Judge Wells) valued the gifts as transfers of interests in the LLC rather than as transfers of a proportionate share of the underlying assets of the LLC, refusing to apply the check-the-box regulations' disregard of single-member LLCs to the wealth transfer tax context. Pierre v. Commissioner, 133 T.C. No. 2 (Aug. 24, 2009). There was a 9-judge concurring opinion (by Judge Cohen), as well as 6-judge (by Judge Kroupa) and 3-judge (by Judge Halpern) dissents.
Update: Joe Kristan has more.
3 responses to “Divided Tax Court Refuses to Apply Check-the-Box Regs to Estate & Gift Tax”
Tax Court: single-member LLCs aren’t ‘disregarded’ for gift taxes
In a rare decision by the full court, the Tax Court yesterday ruled that single-member limited liability companies, which are…
Tax Court: single-member LLCs aren’t ‘disregarded’ for gift taxes
In a rare decision by the full court, the Tax Court yesterday ruled that single-member limited liability companies, which are…
Tax Court: single-member LLCs aren’t ‘disregarded’ for gift taxes
In a rare decision by the full court, the Tax Court yesterday ruled that single-member limited liability companies, which are…
Tax Court: single-member LLCs aren’t ‘disregarded’ for gift taxes
In a rare decision by the full court, the Tax Court yesterday ruled that single-member limited liability companies, which are…
Tax Court: single-member LLCs aren’t ‘disregarded’ for gift taxes
In a rare decision by the full court, the Tax Court yesterday ruled that single-member limited liability companies, which are…
Tax Court: single-member LLCs aren’t ‘disregarded’ for gift taxes
In a rare decision by the full court, the Tax Court yesterday ruled that single-member limited liability companies, which are…
Tax Court: single-member LLCs aren’t ‘disregarded’ for gift taxes
In a rare decision by the full court, the Tax Court yesterday ruled that single-member limited liability companies, which are…
Tax Court: single-member LLCs aren’t ‘disregarded’ for gift taxes
In a rare decision by the full court, the Tax Court yesterday ruled that single-member limited liability companies, which are…
Tax Court: single-member LLCs aren’t ‘disregarded’ for gift taxes
In a rare decision by the full court, the Tax Court yesterday ruled that single-member limited liability companies, which are…