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One may transfer traded securities
to a partnership and then gift partnership interests and pay less gift tax then
if the securities were gifted outright due to allowable discounts for lack of
marketability and minority interests in the partnership.
created a limited partnership and funded it with common stock of a traded
security and then gifted the limited partnership shares to their children. The partnership interest to the children were
discounted because of lack of marketability and they represented a minority
interest. However, the discounts allowed
were less then those sought because the court disallowed a reduction of the
transfer due to restrictions contained in the partnership agreement due to the
limitations imposed by Section 2703 of the Code. It had to do with limitations on the ability
to dispose of the interest where families are involved.
parents were not successful in getting the full discounts they sought, they
nonetheless saved on gift taxes by giving the children partnership interests
rather then gifting the stock outright. Holman
v. Commissioner, 601 F.3d 763 (8th Cir. 2010).