No Valuation Distinction Between a Mere Assignee and a Limited Partner

No Valuation Distinction Between a Mere Assignee and a Limited Partner

      In a recent decision from the Tax Court, it was held that an assignee and a limited partner would have the same valuation discounts. Estate of Streightoff v. Commissioner, T.C. Memo 2018-178 (October 24, 2018).

      The Tax Court was called upon to determine whether a donor had transferred the entirety of a limited partnership interest, or merely an assignee right therein. The court held, in this instance, that the donor had transferred the limited partnership interest, and not a mere assignee interest. The court went on to hold that, however, the distinction did not matter, and that the discount applied would be the same irrespective of whether a limited partnership interest or a mere assignee interest were conveyed. Both had the same right to distributions. While a limited partnership interest did convey a right to vote, that right existed only with respect to the removal of the general partner (thereby effectuating the partnership’s termination), and the limited partners had, to date, never held a vote.