Gift tax on transfer of firm interest applies only if not exempt and the consideration received is inadequate. Gift tax on transfer of a firm interest is chargeable only if the statutory exemption for certain partnership transfers does not apply and the consideration received by the person in whose favour the transfer is made is inadequate. Consideration may consist of capital introduced, labour or services (as from a working partner), or both; Gift Tax officers must examine and determine the adequacy of such consideration when new partners are admitted, profit sharing ratios change, or a sole proprietorship is converted into a partnership.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Gift tax on transfer of firm interest applies only if not exempt and the consideration received is inadequate.
Gift tax on transfer of a firm interest is chargeable only if the statutory exemption for certain partnership transfers does not apply and the consideration received by the person in whose favour the transfer is made is inadequate. Consideration may consist of capital introduced, labour or services (as from a working partner), or both; Gift Tax officers must examine and determine the adequacy of such consideration when new partners are admitted, profit sharing ratios change, or a sole proprietorship is converted into a partnership.
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