18:26-8.14 Partnerships
(a) In the case of a decedent who was a member of one or more partnerships the partnership interest of such decedent is given a value as of the date of death, based upon the following information which is to be submitted with the return:
1. A detailed balance sheet, revised to reflect the market value of the assets as distinguished from the net book value, as of the date of death of the decedent, or as near thereto as may be deemed acceptable;
2. Detailed balance sheets (setting forth the partner's capital accounts) and establishing the net worth of the partnership for each of the five years preceding the date of death of the decedent;
3. Detailed profit and loss statements for the five years immediately preceding the date of death of the decedent;
4. A copy of partnership agreement if any;
5. The nature of the business in which the partnership is engaged;
6. A copy, or copies, if any of a mutual purchase agreement to which the decedent was a party at the time of his death; and,
7. A copy, or copies, of any insurance policies, on the life of the decedent, held by the surviving partners as beneficiaries.
(b) In cases where the decedent was a member of a partnership that constitutes a family limited partnership, special rules apply, including rules related to valuation of the partnership interest.
1. A family limited partnership is a limited partnership in which more than 50 percent of the partners are related by blood or marriage/civil union and which does not have a true business purpose. It may or may not hold an interest in another partnership or other asset which has a true business purpose. One indicia of a true business purpose is that the family limited partnership has and engages in business or commercial transactions with customers, clients, persons or entities other than the partners of the family limited partnership, their family members or other related individuals or entities.
2. An interest in a family limited partnership is valued at the value of the underlying assets on the date of death of the decedent. Discounts for family limited partnership interests are not permitted unless the Director determines that they are warranted by the nature of and risk associated with the underlying assets.
(a) In the case of a decedent who was a member of one or more partnerships the partnership interest of such decedent is given a value as of the date of death, based upon the following information which is to be submitted with the return:
1. A detailed balance sheet, revised to reflect the market value of the assets as distinguished from the net book value, as of the date of death of the decedent, or as near thereto as may be deemed acceptable;
2. Detailed balance sheets (setting forth the partner's capital accounts) and establishing the net worth of the partnership for each of the five years preceding the date of death of the decedent;
3. Detailed profit and loss statements for the five years immediately preceding the date of death of the decedent;
4. A copy of partnership agreement if any;
5. The nature of the business in which the partnership is engaged;
6. A copy, or copies, if any of a mutual purchase agreement to which the decedent was a party at the time of his death; and,
7. A copy, or copies, of any insurance policies, on the life of the decedent, held by the surviving partners as beneficiaries.
(b) In cases where the decedent was a member of a partnership that constitutes a family limited partnership, special rules apply, including rules related to valuation of the partnership interest.
1. A family limited partnership is a limited partnership in which more than 50 percent of the partners are related by blood or marriage/civil union and which does not have a true business purpose. It may or may not hold an interest in another partnership or other asset which has a true business purpose. One indicia of a true business purpose is that the family limited partnership has and engages in business or commercial transactions with customers, clients, persons or entities other than the partners of the family limited partnership, their family members or other related individuals or entities.
2. An interest in a family limited partnership is valued at the value of the underlying assets on the date of death of the decedent. Discounts for family limited partnership interests are not permitted unless the Director determines that they are warranted by the nature of and risk associated with the underlying assets.
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