Chapter 16 - CHAPTER 16 USE OF LLCS AND LPS FOR ESTATE PLANNING

• Jurisdiction: Colorado

Chapter 16 USE OF LLCs AND LPs FOR ESTATE PLANNING^*

SYNOPSIS

§ 16.1 CURRENT ESTATE, GIFT, AND GENERATION-SKIPPING TAX BASICS

§ 16.1.1—Basic Exclusion

§ 16.1.2—Gift Tax Exclusion

§ 16.1.3—Net Effect of Current Law

§ 16.2 VALUATION DISCOUNTS

§ 16.3 ADJUSTMENTS TO BASIS

§ 16.4 ESTATE AND GIFT TAX PLANNING WHEN CLIENT OWNS STOCK IN AN S CORPORATION

§ 16.5 IRS ATTACKS ON FLPs AND FLLCs

§ 16.5.1—I.R.C. §§ 2703 and 2704

§ 16.5.2—The Strangi Case

§ 16.6 DEVELOPMENTS SINCE STRANGI

§ 16.6.1—Kimbell v. United States

§ 16.6.2—Estate of Mirowski v. Commissioner

§ 16.6.3—Holman v. Commissioner

§ 16.6.4—Astleford v. Commissioner

§ 16.6.5—Gross v. Commissioner

§ 16.6.6—Estate of Clyde W. Turner, Sr. v. Commissioner

§ 16.6.7—Estate of Joanne Harrison Stone v. Commissioner

§ 16.6.8—United States v. Byrum

§ 16.6.9—Estate of Barbara M. Purdue v. Commissioner

§ 16.7 AVOIDING A SUCCESSFUL IRS CHALLENGE

§ 16.8 POTENTIAL ADDITIONAL BENEFITS OF USING LLCs/LPs FOR ESTATE PLANNING

§ 16.9 CONCLUDING THOUGHTS

LLCs make excellent vehicles for managing wealth if, for example, the owner of a business wishes to give interests in the business to family members while retaining control over day-to-day operations. The flexibility of the LLC Act allows an LLC to be tailored to any situation. Partnerships may also be used, but LLCs are more flexible and are more suitable if the entity holds an operating business. Since a partnership in Colorado is defined under CUPA as an...