Three prior cases have refused to allow an annual exclusion for gifts of limited partnership interests, for various reasons based on the facts in those cases. Hackl v. Commissioner, 118 T.C. 279 (2002), aff’d, 335 F.3d 664 (7th Cir. 2003); Price v. Commissioner, T.C. Memo. 2010-2; Fisher v. Commissioner, 105 AFTR2d 2010-1347 (S.D. Ind. 2010). Estate of Wimmer holds that gifts of limited partnership interests did qualify for the gift tax annual exclusion because the donees received income distributions from the partnership.
In Estate of Wimmer v. Commissioner, T.C. Memo 2012- 157, the court (in a decision by Judge Elizabeth Paris) held that gifts of limited partnership interests to eleven donees (six of those eleven were beneficiaries who had Crummey withdrawal powers over gifts to a grandchildren’s trust) in each of five years (1996-2000, potentially representing annual exclusion gifts up to $550,000) constituted gifts of “present interests” that qualified for the gift tax annual exclusion. Therefore the gifts were not adjusted taxable gifts that had to be considered in calculating the estate tax (and therefore did not “use up” any of the decedent’s unified estate and gift tax credit amount).
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