Pierre v. Comm'r
United States Tax Court
P transferred cash and publicly traded securities to LLC, a New York limited liability company, in exchange for a 100-percent interest in LLC. P subsequently made four transfers of her interest in LLC to trusts established for the benefit of her son and granddaughter: P transferred as a gift a 9.5-percent interest in LLC to each trust and then sold a 40.5-percent interest in LLC to each trust in exchange for a promissory note.
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P transferred cash and publicly traded securities to LLC, a New York limited liability company, in exchange for a 100-percent interest in LLC. P subsequently made four transfers of her interest in LLC to trusts established for the benefit of her son and granddaughter: P transferred as a gift a 9.5-percent interest in LLC to each trust and then sold a 40.5-percent interest in LLC to each trust in exchange for a promissory note. In valuing the transfers for Federal gift tax purposes, P applied substantial discounts for lack of marketability and control and therefore paid no gift tax on the…
1Opinion of the Court
Wells, Judge:1
Respondent determined deficiencies of $1,130,216.11 and $24,969.19 in petitioner’s Federal gift tax and generation-skipping transfer tax for 2000 and 2001, respectively. The issue to be decided is whether certain transfers of interests in a single-member limited liability company (llc) that is treated as a disregarded entity pursuant to sections 301.7701-1 through 301.7701-3, Proced. & Admin. Regs.,2 known colloquially and hereinafter referred to as the check-the-box regulations, are valued as transfers of proportionate shares of the underlying assets owned by the LLC or are…
2Cases cited19 opinions
- Aquilino v. United StatesSupreme Court of the United States · 1960
- Morgan v. CommissionerSupreme Court of the United States · 1940
- United States v. RodgersSupreme Court of the United States · 1983
- United States v. National Bank of CommerceSupreme Court of the United States · 1985
- United States v. BessSupreme Court of the United States · 1958
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- Swart Enterprises, Inc. v. Franchise Tax BoardCalifornia Court of Appeal · 2017
- 436, Ltd., Heitmeier v. Comm'rUnited States Tax Court · 2015
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