- 22 -
effected a transfer of all their rights as partners. Id. In
essence, we inferred the necessary consent of the other general
partners to admit the GRATs as partners based on all of the facts
and circumstances. Id. at 464-468.
Our decision in Kerr was influenced by a number of factors
that are not present in this case. For instance, the taxpayers
in Kerr asked us to construe strictly the consent provision in
their partnership agreement in the context of their transfers to
the GRATs, notwithstanding the fact that they had disregarded
that provision in other situations. Id. at 464-465. In
addition, we found it difficult to reconcile the taxpayers’
characterization of the transfers with the language of their
assignment documents, each of which contained the following
statement: “The Assigned Partnership Interest constituted a
Class B Limited Partnership interest in * * * [the partnership at
issue] when owned by Assignor and, when owned by Assignee, shall
constitute a Class B Limited Partnership Interest in said
partnership.” Id. at 466. Finally, from an economic reality
standpoint, we found it significant that the taxpayers and their
children, being all of the general partners of the partnership,
could have formally admitted the assignee GRATs as partners at
any time without having to obtain the consent of any other
person. Id. at 468.
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011