Estate of Strangi v. Commissioner
United States Tax Court
D formed a family limited partnership (SFLP) and transferred assets, including securities, real estate, insurance policies, annuities, and partnership interests, to SFLP in return for a 99-percent limited partnership interest. Held: (1) The partnership was valid under State law and will be recognized for estate tax purposes. (2) Sec. 2703(a), I.R.C., does not apply to the partnership agreement. (3) The transfer of assets to SFLP was not a taxable gift.
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D formed a family limited partnership (SFLP) and transferred assets, including securities, real estate, insurance policies, annuities, and partnership interests, to SFLP in return for a 99-percent limited partnership interest. Held: (1) The partnership was valid under State law and will be recognized for estate tax purposes. (2) Sec. 2703(a), I.R.C., does not apply to the partnership agreement. (3) The transfer of assets to SFLP was not a taxable gift. (4) R's expert's opinion as to valuation discounts is accepted.
1DissentBeghe, J.
Having joined the dissents of Judges Parr and Ruwe, I write separately to describe another path to the conclusion that SFLP had no effect on the value of Mr. Strangi’s gross estate under sections 2031 and 2033. In my view, the property to be valued is the property originally held by Mr. Strangi, the so-called contributed property. Notwithstanding that the property in question may have been contributed to a partnership formed on Mr. Strangi’s behalf in exchange for a 99-percent limited partnership interest, we’re not bound to accept the estate’s contention that the property to be valued is its…
2Cases cited18 opinions
- United States v. CartwrightSupreme Court of the United States · 1973
- Helvering v. Alabama Asphaltic Limestone Co.Supreme Court of the United States · 1942
- Lehman v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1940
- United States v. Estate of GraceSupreme Court of the United States · 1969
- King Enterprises, Inc. v. The United StatesUnited States Court of Claims · 1969
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