Moore IRC Section 2043 Issues for FLP PlanningMoore IRC Section 2043 Issues for FLP Planning

For a period of time, Tax Court decisions regarding family limited partnerships (FLPs) had a familiar read to them. A typical FLP case involved an assertion by the Internal Revenue Service that the transferor retained rights to transferred property that were impermissible under Internal Revenue Code Section 2036(a)(1), and the defense would stand or fall on whether the transfer was a bona fide sale for full and adequate consideration. Case analysis largely focused on what worked and didn’t regarding the estate’s ability to demonstrate legitimate non-tax purposes for the transfer. In 2017, Estate of Powell v. Commissioner raised new issues.¹ While variety can be the spice of life—this case certainly left a bad taste for two reasons: (1) t...