Estate of Bongard v. Comm'r
United States Tax Court
In 1980, D incorporated Empak, Inc. In 1986, D established an irrevocable stock accumulation trust (ISA Trust) and funded it with some of his Empak stock. In the mid-1990s it was determined by Empak's board of directors and advisers that pooling all of D's family's Empak stock in a holding company, WCB Holdings, LLC. (WCB Holdings), would better position Empak for a corporate liquidity event, which was necessary to raise capital and remain competitive.
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In 1980, D incorporated Empak, Inc. In 1986, D established an irrevocable stock accumulation trust (ISA Trust) and funded it with some of his Empak stock. In the mid-1990s it was determined by Empak's board of directors and advisers that pooling all of D's family's Empak stock in a holding company, WCB Holdings, LLC. (WCB Holdings), would better position Empak for a corporate liquidity event, which was necessary to raise capital and remain competitive. On Dec. 28, 1996, D and ISA Trust capitalized WCB Holdings by transferring to WCB Holdings their respective shares of Empak stock, and in…
1ConcurrenceLaro, J.
I concur only because I am uncomfortable with the analysis used by the majority in arriving at its result. That analysis applies a new test that the majority has created to decide whether a transfer to a family limited partnership should be respected for Federal tax purposes. The majority applies its test in lieu of deeply ingrained caselaw that conditions satisfaction of the “bona fide sale for an adequate and full consideration in money or money’s worth” exception of section 2036(a) (adequate and full consideration exception) on the transferor’s receipt of property equal in value to that of…
2Cases cited27 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Commissioner v. WemyssSupreme Court of the United States · 1945
- Merrill v. FahsSupreme Court of the United States · 1945
- Acm Partnership, Southampton-Hamilton Company, Tax Matters Partner, in No. 97-7484 v. Commissioner of Internal Revenue Acm Partnership, Southampton-Hamilton Company, Tax Matters Partner v. Commissioner of Internal Revenue, in No. 97-7527Court of Appeals for the Third Circuit · 1998
- United States v. Estate of GraceSupreme Court of the United States · 1969
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