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…
1Concurring in part, dissenting in part
Halpern, J.,
concurring in part and dissenting in part.1
I. Introduction
I write separately to express my disagreement with the majority’s interpretation of the bona fide sale exception found in section 2036(a).2
The majority states:
In the context of family limited partnerships, the bona fide sale for adequate and full consideration exception is met where the record establishes [1] the existence of a legitimate and significant nontax reason for creating the family limited partnership, and [2] the transferors received partnership interests proportionate to the value of the property transferred. *…
2Cases cited15 opinions
- Commissioner v. WemyssSupreme Court of the United States · 1945
- Merrill v. FahsSupreme Court of the United States · 1945
- Rosenthal v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1953
- Kimbell v. United StatesCourt of Appeals for the Fifth Circuit · 2004
- Estate of Cyril I. Magnin, Deceased Donald Isaac Magnin v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1999
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