The Tax Court case of Powell v. Commissioner held that the decedent’s estate owned the assets that the decedent had contributed to a limited partnership because the decedent indirectly retained the power to determine if and when there would be a distribution from the partnership or liquidation of the partnership. This opinion extended the application of Section 2036 to partnerships, stated in the Fifth Circuit Court of Appeals case of Strangi v. Commissioner. In Powell, the decedent did not own a general partner interest. However, the Court held that the decedent was considered to be in control over the general partner, because the general partner was the Agent under the decedent’s Durable Power of Attorney, and as Agent owed a fiduciary duty to the decedent in deciding when to make a distribution from the partnership or cause a liquidation of the partnership.
There appears to be confusion over when the Powell case will apply, what practitioners and clients can safely use planning strategies, and what can be done to avoid applying the Powell result for existing family LLC, limited partnership, and other arrangements.
Learning Objectives:
Gassman, Crotty & Denicolo, P.A.
Partner
[email protected]
(727) 442-1200
Kenneth John Crotty, Esquire is a partner of the law firm Gassman, Crotty & Denicolo, P.A., a highly respected firm specializing in estate planning, tax law, and asset protection. With over 15 years of experience in the legal industry, Mr. Crotty is a specialist in the areas of estate planning, probate, and trust administration.
Our firm was formed in 1987 with one lawyer and a shared secretary and receptionist to provide representation to professionals, business owners and retirees in their estate and related tax and personal planning, business and corporate needs.
Since then we have grown to 6 lawyers and over 20 staff, which we have found over the past two decades to be the best size for us. We are very proud of our team, our systems, and our dedication to providing the best and most appropriate legal services for all clients, whether big or small. Our lawyers meet together almost every morning to discuss and work together on cases, strategies and practice improvement projects in order to work the most efficiently and effectively for our clients. We like what we do and enjoy working together.