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and circumstances must be examined to determine whether a gift is
of a present interest within the meaning of section 2503(b), and
this will be true only where all involved rights and
restrictions, wherever contained, reveal a presently reachable
economic benefit. Since here the primary source of such rights
and restrictions is the Treeco Operating Agreement, its
provisions, in their cumulative entirety, must largely dictate
whether the units at issue conferred the requisite benefit.
Accordingly, we now turn to the Operating Agreement to flesh out
the nature of the property rights transferred to the donees at
the time of their receipt of the Treeco units and whether such
rights rose to the level of a present interest on account of
either the units themselves (considered in this section) or the
income therefrom (considered in section IV.C., infra).
Petitioners offer the following summary of the rights
inuring to the donees upon their receipt of the LLC units:
Upon transfer the Donees acquired membership
rights and obligations in the gifted Treeco units which
were identical to those which Petitioners had in the
Treeco units they retained, including the rights under
the Treeco Operating Agreement to have all net income
or capital gains allocated, all cash distributions
made, and net loss allocated (subject to an allocation
of losses to A.J. Hackl for a period which was designed
to ensure the current deductibility of Treeco losses
for federal income tax purposes) based on the number of
units held in relation to the total number of units,
the right to have capital accounts established and
maintained on behalf of each member in the manner
provided by Treas. Reg. � 1.704-1(b)(2)(iv), the right
to offer units for sale to Treeco, or to sell their
units to third parties (subject to manager approval),
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