Wednesday, October 8, 2008
Steve Akers (Bessemer Trust) wrote an analysis of the case of Astleford v. Commissioner.
Here is his synopsis of the case:
This gift tax case allows lack of control and marketability discounts for tiered partnership interests. An FLP owned a 50% interest in a real estate general partnership and various other real estate tracts. An approximate 20% absorption discount was allowed for valuing a 1,187 acre tract in the general partnership. The FLP’s 50% interest in the general partnership was valued as a partnership interest rather than as an assignee interest. Even so, a 30% combined discount for lack of control and marketability was allowed for the 50% interest in the general partnership. An approximate 17% lack of control and 22% lack of marketability discount (for a seriatim discount of about 35%) was allowed for valuing gifts of 90% of the limited partnership interests (three 30% gifts in 1996 and 1997).