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.
1Opinion of the Court
COHEN, Judge:
On December 1, 1998, respondent determined a $2,545,826 deficiency in the Federal estate tax of the Estate of Albert Strangi, Rosalie. Gulig, independent executrix. In the alternative, respondent determined a Federal gift tax deficiency of $1,629,947.
After concessions by the parties, the issues for decision are (alternatively): (1) Whether the Strangi Family Limited Partnership (SFLP) should be disregarded for Federal tax purposes because it lacks business purpose and economic substance; (2) whether the SFLP is a restriction on the sale or use of property that should be…
2Cases cited26 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Helvering v. CliffordSupreme Court of the United States · 1940
- Frank Lyon Co. v. United StatesSupreme Court of the United States · 1978
- United States v. CartwrightSupreme Court of the United States · 1973
- Marie H. Hamm v. Commissioner of Internal Revenue, William Hamm, Jr. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1963
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3Cited by31 opinions
- Albert Strangi, Deceased, Rosalie Gulig, Independent v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 2005
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- Ax v. Comm'rUnited States Tax Court · 2016
- Boca Investerings Partnership v. United StatesDistrict Court, District of Columbia · 2001
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