Discounts Under Siege

, By Radd L. Riebe

The IRS figuratively issued a wanted poster in 2009, ‘Wanted: Discounts Dead or Alive.’ Joining in the hunt were Congress, the Obama administration, and the Tax Court

By Radd L. Riebe

The year 2009 was less than two weeks old when Congressman Earl Pomeroy (D-N.D.) introduced a bill¹ with the express purpose of legislatively prohibiting discounts for transfers of interests in family-owned holding companies when the underlying assets are passive investments.

The Pomeroy bill foreshadowed where the action would be in the courtroom in 2009, as critical cases focused on family limited partnerships (FLPs) and limited liability companies (LLCs). The Internal Revenue Service concentrated its efforts on those cases where the battleground was over conditions precedent — if the IRS was successful in its argument, a court could preclude any consideration of discounts or diminish their magnitude.

Sign in to
view the full article

Not a subscriber?

Subscribe & Save
Get immediate access to Trust & Estates online
Subscriber Benefits
Learn more about Trust & Estates magazine, online article access and our free enewsletters.

Wealth Watch E-Letter Subscribe

Fate of Famed Art Collection Unresolved

By David Thayne Leibell, partner in the Stamford, Conn. and New York City offices of Wiggin and Dana LLP

Tennessee Chancery Court temporarily blocks the sale by financially strapped college of a 50 percent interest to a Walmart heiress’ new museum...

The Shifting Sands of the Tax Burden

By John T. Brooks, partner, and Samantha E. Weissbluth, senior counsel, Foley & Lardner LLP, Chicago

A U.S. Court of Appeals ruling underscores the importance of paying attention to the tax implications of selling or transferring property before a testator’s death...

View Past Wealth Watch E-letters...