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FLPs and Sec. 2036(a).

In Albert Strangi, 5th Cir., 7/15/05, the Fifth Circuit affirmed a Tax Court decision (TC Memo 2003-145) that assets transferred to a family limited partnership (FLP) were includible in the estate under Sec. 2036(a)(1). For details, see Tax Trends, "Taxpayer Loses FLP Appeal on Retained Rights," TTA, September 2005, p. 574.

This case continues to serve as a reminder of what not to do with a FLP--retain actual possession or use of property (without reimbursement) after the transfer; make improperly planned distributions; and pay personal expenses. These factors and many others are highlighted in the AICPA Tax Division's Trust, Estate, and Gi8 Tax Technical Resource Panel's Checklist of Issues to Consider in Yearly Administration of Family Limited Partnerships, at www.cpa2biz.com/NR/rdonlyres/ efds63xigo24sd2vvdcmjo5ccaadqbcko gemnvarp156u7gavcxplevahf7r2wqupq2tt k44e7fsuo/2036checlistkeyguidedonec.doc.
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Title Annotation:COURT DECISIONS
Author:Laffie, Lesli S.
Publication:The Tax Adviser
Date:Oct 1, 2005
Words:133
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