Category Archives: Family Entities

Avoiding Liability Risks of Single-Member LLCs

Posted on March 26, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

Businesses have traditionally limited exposure to liabilities by forming a group of corporations or subsidiaries to insulate assets. Although effective, these structures are complicated and burdensome, often requiring separate boards of directors and annual meetings. Single-member LLCs (SMLLCs), which require few formalities, can also be utilized to insulate liabilities of various divisions of a business, or even the assets of a single taxpayer, such as an individual or corporation. Continue reading →

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Tax Court Holds Single Member LLC Not Ignored for Gift Tax Purposes

Posted on March 23, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

Pierre v. Com’r, 133 T.C. No. 2 (8/4/09) Continue reading →

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The IRC § 2036 Trap in Planning With FLPs & Grantor Trusts

Posted on March 15, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

Printer-friendly PDF Memorandum:  The IRC § 2036 Trap in Planning With FLPs & Grantor Trusts.wpd The IRS has advanced many theories to challenge the gift and estate tax savings occasioned by the use of family entities and grantor trusts in … Continue reading →

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FAMILY DISCOUNT ENTITIES: INCOME TAX CONSIDERATIONS

Posted on March 15, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

FLPs (and LLCs) are ideal holding entities for family assets since fractional discounts yield substantial transfer tax savings. While the income tax treatment of asset transfers to and from these “flow thru” entities is generally placid, income tax planning should not be relegated to a mere afterthought. Continue reading →

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Anticipating IRS Challenges to FLPs and FLLCs

Posted on March 15, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

Possessed of favorable tax attributes and tremendous flexibility, family limited partnerships (FLPs) and family limited liability companies (FLLCs) have proliferated over the past decade and have become an integral part of many estate plans. They can be used to manage a family business, to implement a plan of family succession and can even serve as extremely effective testamentary instruments. Recognized as separate legal entities, FLPs and FLLCs also accomplish formidable asset protection objectives. Continue reading →

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Valuation Discounts for LLCs

Posted on March 15, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

LLCs possess the desirable corporate attribute of limited liability, and the valuable “flow thru” partnership tax attribute. New York’s LLC statute, although containing default terms, permits customization of the operating agreement. The LLC form therefore provides the opportunity for members to structure the management, tax classification and capital structure of the entity to suit the members’ needs. Continue reading →

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Family Limited Partnerships

Posted on March 15, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

Income tax problems associated with family limited partnerships (FLPs) are rarely serious enough to militate against their use in estate planning. Nevertheless, income tax issues arising in connection with the formation and operation of FLPs deserve consideration, since problems can minimized by careful tax planning. Continue reading →

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