Tax Court Holds Familial Transfer Not A Gift Because Made In Ordinary Course Of Business

In a recent division opinion, the Tax Court considered whether a settlement agreement that required shares be transferred to trusts for the benefit of the transferor’s children were not taxable gifts because they were ordinary business transactions. The case is a good read because it unpacks the Tax Court’s framework for considering the “ordinary business transaction” rule in the gift tax context. Also, the Tax Court rejected the IRS’s proposed “source of the consideration” standar...