-49-
Fiesta Invs., LLC (In re Ehmann), 319 Bankr. 200 (Bankr. D. Ariz.
2005).
Third, as to petitioners’ claim that the LRFLP was formed to
facilitate decedent’s gift giving and to preserve the value of
her gifts, even if gift giving were an actual reason for the
LRFLP’s formation, it is not a significant nontax purpose that
could characterize the transfer of decedent’s assets to the LRFLP
as a bona fide sale.23 See Estate of Thompson v. Commissioner,
382 F.3d 369, 373-374, 379; Estate of Bigelow v. Commissioner,
T.C. Memo. 2005-65; cf. Estate of Bongard v. Commissioner,
124 T.C. at 126-127. While petitioners also assert on brief that
the LRFLP was formed to avoid the burdens and costs associated
with giving individual assets to each of the donees, we are
unpersuaded by this assertion. Petitioners did not include this
assertion in their issues memorandum as a reason for forming the
LRFLP, and it appears to be nothing more than an after-the-fact
23 We note for completeness that we disagree with
petitioners’ claim that gift giving was an actual reason for the
formation of the LRFLP. In fact, it appears to us that the
making of gifts was made harder after that formation. Before the
LRFLP was formed, decedent received monthly brokerage statements
that listed the value of the stocks and bonds held at the
brokerage firm. Afterwards, any gift of a limited partnership
interest had to be appraised for Federal tax purposes, a process
that most likely is more time consuming and expensive than
valuing the stocks and bonds directly. Such is especially so
given that the appraisal of the limited partnership interests
would almost always include discounts for lack of control and
lack of marketability and that the valuation of discounts is a
subject on which taxpayers and the Commissioner may reasonably
disagree.
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