Tax Court Continues to Crack Down on FLPs

by Dennis Stuchell 8. February 2012 08:45
A recent U.S. Tax Court case (Estate of Liljestrand) reminds us that proper planning is essential when forming a Family Limited Partnerhship (FLP).  The Court included the FLP assets in the estate and hit the taxpayer for an additional $2.5 million in estate taxes.  The Court stated a number of structural problems in their opinion such as failure to keep proper books and records, commingling of personal and FLP funds, and lack of a proper valuation. You can find more detail on Estate of Liljestrand in Trusts & Estates. This case is just one more demonstration of the importance of careful planning  and due diligence when your family's succession plan is at stake.  Be sure to choose proven valuation and tax professionals that are well qualified to assist with the critical task of transferring wealth to the next generation.
Categories: Advisory | Tax