The Passive Activity Loss Rules

Estate planners often must make a decision whether to recommend a family limited partnership (FLP) or family limited liability company (FLLC) to achieve the best federal estate tax savings for a client.1 While many considerations impact the choice of an FLP versus an FLLC,2 one factor that probably escapes consideration by many practitioners is the impact of the passive activity loss (PAL) rules for

Estate planners often must make a decision whether to recommend a family limited partnership (FLP) or family limited liability company (FLLC) to achieve the best federal estate tax savings for a client.1 While many considerations impact the choice of an FLP versus an FLLC,2 one factor that probably escapes consideration by many practitioners is the impact of the passive activity loss (PAL) rules for federal income tax purposes on that choice.

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