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#1
09-14-2003, 10:51 PM
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 Re: Major LLC tax ruling - quote - > > US Tax Court Hackl v IRS, affirmed by 7th US Court of
Easy to fix Hackl issues. One, don't place such> > Appeals ruled gifts of LLC units were not gifts of a present > > interest(2503) and therefore disallowed for annual > > exclusion. Basis for not of present interest: > > > 1. Donee could only sell units back to LLC and only at > > the manager's discretion. > > 2. Members would receive income only in the event of a > > distribution, based on the manager's discretion. > > > Would appreciate comments and analysis. restrictions in the Regulations/Operating Agreement. Rather than the manager (or general partner in a limited partnership) having unfettered discretion to effectively veto attempted transfers give the other Members/Partners pro rata a right of first refusal at the same terms. Two, just make cash distributions at the Manager(s)/General Partner(s) discretion using ordinary and reasonable business prudence/business acumen. Moral: Don't trick up your agreement with so many restrictions that the ownership interest is effectively not a "present" interest because so many strings are attached. You can get the same effective control with different means without risking your present interest. Jason Richardson Attorney, CPA Sherman, Texas I am not your lawyer, nor your accountant, this is not legal advice, nor is it accounting advice, etc.... << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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09-07-2003, 04:47 AM
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| Re: Major LLC tax ruling "Raymond" <raymond912002[at]yahoo.com> wrote: - quote - > US Tax Court Hackl v IRS, affirmed by 7th US Court of
This case was decided by the Tax Court a year ago. I doubt> Appeals ruled gifts of LLC units were not gifts of a present > interest(2503) and therefore disallowed for annual > exclusion. Basis for not of present interest: > 1. Donee could only sell units back to LLC and only at > the manager's discretion. > 2. Members would receive income only in the event of a > distribution, based on the manager's discretion. > Would appreciate comments and analysis. the underlying factors in the properly reached decision have changed. No I have not read the appellate decision, but I doubt anything new was touched on. -- David M. Woods, EA Boston, MA 02109 Postings here are general information only and not to be relied upon as advice. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
09-05-2003, 01:39 AM
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| Major LLC tax ruling US Tax Court Hackl v IRS, affirmed by 7th US Court of Appeals ruled gifts of LLC units were not gifts of a present interest(2503) and therefore disallowed for annual exclusion. Basis for not of present interest: 1. Donee could only sell units back to LLC and only at the manager's discretion. 2. Members would receive income only in the event of a distribution, based on the manager's discretion. Would appreciate comments and analysis. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| llc, major, ruling, tax |
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