- 65 -
exception in the context of a transfer to a partnership only
when: (1) The record establishes either that (i) in return for
the transfer, the transferor received a partnership interest and
any other consideration with an aggregate fair market value equal
to the fair market value of the transferor’s transferred
property, or (ii) the transfer was an ordinary commercial
transaction (in which case, the transferred property and the
consideration received in return are considered to have the same
fair market values), and (2) the transfer was made with a
business purpose or, in other words, a “useful nontax purpose
that is plausible in light of the taxpayer’s [transferor’s]
conduct and useful in light of the taxpayer’s economic situation
and intentions.” ACM Pship. v. Commissioner, T.C. Memo.
1997-115, affd. in part and revd. in part on an issue not
relevant herein 157 F.3d 231 (3d Cir. 1998); see also CMA
Consol., Inc. v. Commissioner, T.C. Memo. 2005-16; Salina Pship.,
L.P. v. Commissioner, T.C. Memo. 2000-352.
1. Majority’s Conclusion That Transferors Receive
Partnership Interests Proportionate to the Value of the
Property Transferred
Where the record establishes the existence of a legitimate
and significant nontax reason for creating a family limited
partnership, the majority concludes that the adequate and full
consideration exception is met if the transferors received
partnership interests proportionate to the value of the property
Page: Previous 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 NextLast modified: May 25, 2011