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those interests were merely assignee interests under State law.
TRLPA section 7.02(a)(2) provides that an assignment of a
partnership interest does not dissolve a limited partnership or
entitle the assignee to become or exercise the rights or powers of
a partner. TRLPA section 7.02(a)(3) and (4) provides that an
assignee is allocated the income, gain, loss, deduction, or credit
to which the assignor was entitled, and, until the assignee becomes
a partner, the assignor continues to be a partner and to have the
power to exercise any rights or powers of a partner. TRLPA section
7.04(a) provides that an assignee of a partnership interest may
become a limited partner if and to the extent that the partnership
agreement provides for such a transition or on the consent of all
partners. Relying on the definition of an applicable restriction
contained in section 25.2704-2(b), Gift Tax Regs., petitioners
maintain that an assignee’s inability to force KFLP to liquidate
under the KFLP partnership agreement imposes no greater restriction
than those imposed upon assignees under TRLPA.
Petitioners’ contention that the partnership interests they
transferred to the GRAT’s trustees were assignee interests as
opposed to limited partnership interests is based on a strict
construction of the KFLP partnership agreement. In particular,
although petitioners made the transfers to themselves as GRAT’s
trustees, petitioners nonetheless maintain that their children, as
KFLP general partners, had to consent to the admission of the
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