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The FLP, the Transfer Taxes, and the Income Tax

19 Pages Posted: 16 Apr 2010  

Laura Cunningham

Benjamin N. Cardozo School of Law

Date Written: April 16, 2010


Despite repeated calls for reform, Congress has declined to act to curb transfer tax avoidance through the use of family limited partnerships (“FLP’s"). Use of FLP’s allows taxpayers to substantially leverage their exemption from estate tax, and reduce the effective rate of tax on even the most liquid investment assets. This article reviews the current state of the law in the Tax Court on FLP’s, renews the call for Congressional action, and explains why FLP’s are not just a “death tax” problem.

Keywords: Family Limited Partnership, FLP, Estate Tax, Estate Tax Reform, Basis Inconsistency, Valuation Discounts

Suggested Citation

Cunningham, Laura, The FLP, the Transfer Taxes, and the Income Tax (April 16, 2010). Tax Notes, May 2010; Cardozo Legal Studies Research Paper No. 297. Available at SSRN:

Laura Cunningham (Contact Author)

Benjamin N. Cardozo School of Law ( email )

55 Fifth Ave.
New York, NY 10003
United States

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