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Glossary of Estate Planning - Federal case law

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Gallenstein
Consideration furnished rule applies to joint property held by spouses obtained prior to 1977 (otherwise 50/50).
MA may not follow Gallenstein.
United States v. Allen
293 F.2d 916 (1961)
Full and adequate consideration to avoid 2035 (a) means an amount equal to what would be includable if no transfer were made
Silverman rule
In case of 3 year rule, if multiple people contribute to property, it is included pro rata between them.
Walton
Said that you could create zeroed out GRATs
Proctor
TTT
McCord v. Comm'r
120 T.C. 358 (2003)
Appeal to 5th circuit
You can allocate a gift of discounted FLP interests to charity based upon a defined value (i.e., a percentage based upon the value of the property as finally determined for gift tax purposes).
Atkinson v. Comm'r
115 T.C. 26 (2000)
If a CRAT is included in the Grantor's estate because of a failure to make annuity payments, no charitable deduction is available.
United States v. Estate of Grace
395 U.S. 316 (1969)
Reciprocal trust doctrine
Karmazin
TTT
Miller v. Comm'r
71 T.C.M. 1674 (1996)
Provides guidelines as to how one distinguishes a loan from a gift
Estate of Rosen v. Comm'r
T.C. Memo 2006-115
TTT
Crane
TTT
Strangi II
T.C. Memo 2003-145
IRS included an FLP in a donor's estate on the basis of 2036 (a)(1), and PERHAPS 2036 (a)(2)
Kimbell v. United States
244 F. Supp. 2d 700 (2002)
Bona fide sale exception of 2036 applies, because the decednet received a pro rata FLP interest and the transaction was not a sham or disguised gift
Estate of Bongard v. Comm'r
124 T.C. 95 (2005)
LLC was upheld.
FLP failed.

TTT
Estate of Blount v. Comm'r
428 F.3d 1338 (2005)
Disregarding expert's conclusion that a buy-sell method and result were comparable to other companies where conclusion ignored the nonoperating assets held by the business
Hackl
Gifted FLP interests needed to give a present interest to donees to benefit from annual exclusion.
Bosch
When state law has federal tax implications it must be resolved by highest court in state to be binding on IRS.
Wilson v. Bowers
57 F2d 682 (2d Cir. 1932)
Lomb v. Sugden
82 F.2d 166 (2d Cir. 1936)
Set forth 4 of the 6 requirements for the agreement price in a buy sell agreement to be respected by the IRS

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