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Taxpayer Loss Under Section 2703

Posted June 22, 2010

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Taxpayer loss under Section 2703 - The Ct. in Holman disregards partnership restrictions

Holman v. Commissioner of Internal Revenue, Court of Appeals, 8th Circuit 2010
130 TC 170, 187 (2008), affd. ___F.3d___(8th Cir., Apr. 7, 2010)

The IRS wins on Section 2703 issue, ignoring Partnership Agreement Restrictions

Taxpayer, Holman, contributed a large amount of Dell stock into a Limited Partnership then gifted limited shares to their children. The value of the stock included discounts for both lack of control, and lack of marketability, with an effective overall discount rate of approximately 49%.