Strangi Affirmed

On July 15, 2005, the 5th Circuit upheld the Tax Court’s decision in Estate of Strangi v. Commissioner, T.C. Memo 2003-145 (2003), commonly referred to as “Strangi II.”

Here is an excerpt from the court’s opinion, Estate of Strangi v. Commissioner, No. 03-60992 (5th Cir. July 15, 2005):

[W]e hold that the Tax Court did not clearly err in finding that Strangi’s transfer of assets to SFLP lacked a substantial non-tax purpose. Accordingly, the “bona fide sale” exception to § 2036(a) is not triggered, and the transferred assets are properly included within the taxable estate. We therefore affirm the estate tax deficiency assessed against the Estate.