- 52 -
Both parties set forth facts supporting their respective
positions regarding decedent’s transfer of WCB Holdings class B
membership units to BFLP.
In support of its contention that decedent’s transfer to
BFLP satisfied the bona fide sale exception, the estate asserts
that ISA Trust was adequately and independently represented in
negotiating the terms of the BFLP transaction. Mr. Boyle
explained to Mark Bongard, the other trustee of ISA Trust, the
terms and reasons for engaging in the partnership. In addition,
after BFLP was formed, partnership formalities were complied
with.
Conversely, respondent asserts that BFLP was “simply a paper
transaction designed to facilitate the distribution of family
wealth both before and after death while leaving decedent’s
lifetime control of Empak unimpaired.”11 In support of his
position, respondent asserts that decedent’s and ISA Trust’s
contributions to BFLP were not a true pooling of assets because
decedent’s relationship to the contributed assets remained the
same before and after the contribution. Following decedent’s
contribution to BFLP and until his death, BFLP never engaged in
any investment transactions or decisions. BFLP had neither an
investment plan nor a diversification strategy.
11Respondent has not challenged whether BFLP is a
partnership that should be recognized for tax purposes under sec.
761(a) or 7701(a)(2), so we do not reach that issue in this case.
Page: Previous 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 NextLast modified: May 25, 2011