Avoiding Pitfalls When making Family Limited partnership Gifts

Aug 23, 2016

The formation and transfer of assets to a Family Limited Partnership (FLP) or Limited Liability Company (LLC) can provide multiple benefits for individuals and families including asset protection, dispute resolution and favorable tax benefits for gifting. However, many FLPs and LLCs used for gifting receive special scrutiny by the Internal Revenue Service (IRS). In fact, certain IRS officials have stated (off the record) that every FLP will be examined. The primary reason that they are unpopular with the IRS is due to the tax benefits received by the donor that lower revenue to the Department of Treasury.

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