Court’s FLP ruling is a win-win — and a reminder

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Abstract: The number of cases challenging the legitimacy of family limited partnerships (FLPs) continues to grow. Typically, these can be classified as either a taxpayer or an IRS win, but one recent U.S. Tax Court ruling is at least a partial victory for both sides. The case involves two separate transfers of interest in an FLP — one made three days before the decedent’s death. This article explains why one transfer passed muster with the Tax Court and the other didn’t, while a sidebar discusses whether the fair market value of the decedent’s assets in a QTIP trust were includible in her gross estate.