A Stroll Through Chancellor Chandler’s Magic Kingdom
Introduction
The decision of the Delaware Supreme Court in In re The Walt Disney Company Derivative Litigation,...
Resources
- Posted by Stephen F. Later
Use Of The Annual Exclusion For Transfers Of Interests In Family Entities
The use of business entities—limited partnerships, closelyheld corporations and limited liability companies—offers clients ease of management, protection from creditors and, of course, benefits in the intrafamilial transfer of assets.
However, as utilization of the annual gift tax exclusion is often an important component of intergenerational transfer plans, the decision of the 7th Circuit Court of Appeals in Hackl v. Commissioner obliges practitioners to review the alienation restrictions inserted in governance agreements of entities used for intrafamilial transfers to ensure that the transferred interests are, in fact, present interests under recent judicial guidance.
The use of the annual gift tax exclusion is, subject to certain exceptions, limited to gifts of a present interest. The IRS defines a present interest as “an unrestricted right to the immediate use, possession, or enjoyment of the property or income from the property” and thus excludes other interests or estates that “are limited to commence in use, possession, or enjoyment at some future date or time.”
The IRS approaches intergeneration transfers of limited partnership units,
Read Related Publications
Traps For The Unwary In The Perfection Of Security Interests In Quirky Collateral
Introduction
The Uniform Commercial Code¹ (the “UCC”) generally governs the creation and perfection of security interests in...
Use Of The Annual Exclusion For Transfers Of Interests In Family Entities
The use of business entities—limited partnerships, closelyheld corporations and limited liability companies—offers clients ease of management,...
Member’s Bankruptcy Is No Fiesta For Remaining LLC Members
Introduction
The disposition of limited liability company (“LLC”) membership interests upon bankruptcy of a member is, in...
Restoring The Benefit Of The Bargain
North Carolina Permits Limited Attorneys’ Fees Recovery in Business Contracts
The common law of North Carolina provides...
