APPEALS COORDINATED ISSUE
Discounts for Family Limited Partnerships
Mary Lou Edelstein
FACTUAL/LEGAL ISSUE: Legal and Factual
/s/ Cynthia A. Vassilowitch
October 18, 2006
Director, Technical Guidance
/s/ Diane S. Ryan
October 20, 2006
Director, Technical Services DATE
EFFECTIVE DATE: October 20, 2006
Any line marked with a # is for Official Use Only
APPEALS SETTLEMENT GUIDELINES
FAMILY LIMITED PARTNERSHIPS AND FAMILY LIMITED LIABILITY
1. Whether the fair market value of transfers of family limited partnership or
corporation interests, by death or gift, is properly discounted from the pro rata
value of the underlying assets.
2. Whether the fair market value at date of death of I.R.C. §§ 2036 or 2038
transfers should be included in the gross estate.
3. Whether there is an indirect gift of the underlying assets, rather than the family
limited partnership interests, where the transfers of assets to the family limited
partnership (funding) occurred either before, at the same time, or after the gifts of
the limited partnership interests were made to family members.
4. Whether an accuracy-related penalty under I.R.C. § 6662 is applicable to any
portion of the deficiency.
Family limited partnerships and family corporations have long been used in the conduct
of active businesses, primarily to provide a vehicle for family involvement in th