- 6 - (A) there is a transfer of an interest in a corporation or partnership to (or for the benefit of) a member of the transferor's family, and (B) the transferor and members of the transferor's family hold, immediately before the transfer, control of the entity, any applicable restriction shall be disregarded in determining the value of the transferred interest. (2) Applicable restriction.--For purposes of this subsection, the term "applicable restriction" means any restriction-- (A) which effectively limits the ability of the corporation or partnership to liquidate, and (B) with respect to which either of the following applies: (i) The restriction lapses, in whole or in part, after the transfer referred to in paragraph (1). (ii) The transferor or any member of the transferor's family, either alone or collectively, has the right after such transfer to remove, in whole or in part, the restriction. (3) Exceptions.--The term "applicable restriction" shall not include-- * * * * * * * (B) any restriction imposed, or required to be imposed, by any Federal or State law. Section 25.2704-2(b), Gift Tax Regs., further defines an applicable restriction as follows: (b) Applicable restriction defined. An applicable restriction is a limitation on the ability to liquidate the entity (in whole or in part) that is more restrictive than the limitations that would apply under the State law generally applicable to the entity in the absence of the restriction. * * *Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011