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Family Limited Partnerships: Business and Tax Benefits Come With Caution  


Author:  Gregg S.  Woodruff.; Charles R.  Pryor.; Nicholas C.  Lynch.


Source: Volume 29, Number 04, Summer 2012 , pp.75-88(14)




Journal of Taxation of Investments

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Abstract: 

A family limited partnership (FLP) may provide a great asset protection and wealth building opportunity for the right clients. Besides offering significant business and income tax benefits, an FLP can be used in estate planning to dramatically reduce transfer taxes. This article details the benefits afforded by FLPs and highlights potential pitfalls to avoid when forming and operating an FLP.

Keywords: FLP; limited partnership; business purpose; valuation discount; asset protection; family business; gift tax planning; estate tax planning; income tax planning

Affiliations:  1: Western Illinois University; 2: Western Illinois University; 3: Georgia Southern University.

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