U.S. Appeals Court Upholds Estate Tax Deficiency for Partnership Transfer Under Section 2036

The U.S. Court of Appeals for the Fifth Circuit affirmed the Tax Court’s decision that assets transferred to a limited partnership shortly before the decedent’s death were includible in the gross estate under I.R.C. §2036(a). Taxpayer, a businesswoman with Alzheimer’s disease, had her great-nephew as agent transfer $17 million of her assets into a limited partnership in May and June 2016 as her health rapidly declined. The transfers occurred within weeks of her death, with the Estate valuing the partnership interest at approximately $11 million rather than the $17 million in transferred assets, resulting in a $6 million reduction in ...