{"id":4522,"date":"2012-04-30T09:12:39","date_gmt":"2012-04-30T16:12:39","guid":{"rendered":"http:\/\/www.keytlaw.com\/azllclaw\/?p=4522"},"modified":"2018-10-07T10:39:24","modified_gmt":"2018-10-07T17:39:24","slug":"wandry-v-commissioner","status":"publish","type":"post","link":"https:\/\/www.keytlaw.com\/azllclaw\/2012\/04\/wandry-v-commissioner\/","title":{"rendered":"Taxpayer Victory in U.S. Tax Court Blesses New Way to Transfer Family Buiness"},"content":{"rendered":"

Wall St. Journal<\/em><\/strong>:\u00a0 “Small-business owners often complain of feeling caught in the cross hairs of the tax code. For a change, here’s good news.\u00a0 The Tax Court has just blessed a new technique that owners of closely held businesses\u2014and wealthy families\u2014can use to pass assets to heirs with a minimum of taxes and complications. The ruling in the case, Wandry v. Commissioner,<\/em> is stirring up excitement among experts.”<\/p>\n

The taxpayers owned a limited liability company worth approximately $1 million dollars.\u00a0 In 2004 they created a plan by which they would make gifts each year of membership interests in the LLC to their children and grandchildren.\u00a0 Their gift plan provided that at no time could an annual gift to a donee exceed the then amount of the U.S. gift tax exemption (currently $,3,000).\u00a0 The court ruled that because of the method the taxpayers used to make the gifts it was not possible for any gift to ever exceed the amount gift tax exclusion amount therefor no gift tax was owed.<\/p>\n

P.S.\u00a0 The taxpayers plan included a clause that provided that to the extent any gift ever exceeded the annual gift tax exclusion amount the excess over the exclusion amount would go to a charity rather than the donee.\u00a0 This type of clause gives the IRS no reason to challenge the taxpayers action because even if the IRS were successful on its claim the excess gift amount would go to the charity and the taxpayers would be entitled to a corresponding charitable deduction.<\/p>\n","protected":false},"excerpt":{"rendered":"

Wall St. Journal:\u00a0 “Small-business owners often complain of feeling caught in the cross hairs of the tax code. For a change, here’s good news.\u00a0 The Tax Court has just blessed a new technique that owners of closely held businesses\u2014and wealthy families\u2014can use to pass assets to heirs with a minimum of taxes and complications. The ruling in the case, Wandry v. Commissioner, is stirring up excitement among experts.” The taxpayers owned a limited liability company worth approximately $1 million dollars.\u00a0 In 2004 they created a plan by which they would make gifts each year of membership interests in the LLC to their children and grandchildren.\u00a0 Their gift plan provided that at no time could an annual gift to a donee exceed the then amount of the U.S. gift tax exemption (currently $,3,000).\u00a0 The court ruled that because of the method the taxpayers used to make the gifts it was not possible for any gift to ever exceed the amount gift tax exclusion amount therefor no gift tax was owed. P.S.\u00a0 The taxpayers plan included a clause that provided that to the extent any gift ever exceeded the annual gift tax exclusion amount the excess over the exclusion amount would go to a charity rather than the donee.\u00a0 This type of clause gives the IRS no reason to challenge the taxpayers action because even if the IRS were successful on its claim the excess gift amount would go to the charity and the taxpayers would be entitled to a corresponding charitable deduction.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[38],"tags":[],"class_list":["post-4522","post","type-post","status-publish","format-standard","hentry","category-tax-issues"],"yoast_head":"\nTaxpayer Victory in U.S. Tax Court Blesses New Way to Transfer Family Buiness<\/title>\n<meta name=\"description\" content=\"Wandy vs. Commission is a 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