Going Non-Vertical With Fund InterestsGoing Non-Vertical With Fund Interests
The vagaries and draconian nature of Internal Revenue Code Section 2701 have understandably led to widespread deference to the vertical slice rule. However, it is essential to bear in mind that the vertical slice isn't actually a rule, but rather one of a number of exceptions to the application of Section 2701. When adherence to the vertical slice exception isn't feasible or would produce an undesirable
N. Todd Angkatavanich & David A. Stein
The vagaries and draconian nature of Internal Revenue Code Section 2701 have understandably led to widespread deference to the “vertical slice rule.” However, it is essential to bear in mind that the “vertical slice” isn't actually a rule, but rather one of a number of exceptions to the application of Section 2701. When adherence to the vertical slice exception isn't feasible or would produce an undesirable result for your client, you should consider alternative approaches.
Background
Over the past 24 months, despite the obvious transfer tax advantages, inherent wealth transfer planning opportunities that existed due to the economic downturn were simply not as much of a priority for many fund principal...
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