Careful Drafting Required

Based on Price and Fisher, it seems that ownership of an interest in a closely held entity is likely not a presently reachable economic benefit as required by the Tax Court in Hackl, especially if there are restrictions on sale of the interest. The court in Fisher stated that not even a right to is sufficient. The courts seem to require a gift of cash or something readily convertible to cash to qualify

Based on Price and Fisher, it seems that ownership of an interest in a closely held entity is likely not “a presently reachable economic benefit” as required by the Tax Court in Hackl, especially if there are restrictions on sale of the interest. The court in Fisher stated that not even a right to “use” is sufficient. The courts seem to require a gift of cash or something readily convertible to cash to qualify for the annual exclusion.

Price and F

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