Christine M. Hackl - Page 1

                                   118 T.C. No. 14                                    

                               UNITED STATES TAX COURT                                

                          CHRISTINE M. HACKL, Petitioner v.                           
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      
                         ALBERT J. HACKL, SR., Petitioner v.                          
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket Nos. 6921-00, 6922-00.      Filed March 27, 2002.               

                    In 1995 and 1996, Ps A and C made gifts to their                  
               children and grandchildren of membership units in                      
               Treeco, LLC, a limited liability company.  Treeco had                  
               previously been organized by A to hold and operate tree                
               farming properties.  This timberland had been purchased                
               by A to provide investment diversification in the form                 
               of long-term growth and future income.  Treeco was                     
               governed by an Operating Agreement which set forth the                 
               rights and duties conferred on members and the manager                 
               and which designated A as manager.  At the time of the                 
               gifts, it was correctly anticipated that Treeco and its                
               successor entities would generate losses and make no                   
               distributions for a number of years.                                   
                    Held:  The gifts of Treeco units made by Ps fail                  
               to qualify for the annual gift tax exclusion provided                  
               in sec. 2503(b), I.R.C.                                                

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