Tax Type
Estate Tax
Description
Partnership property; Nonresident decedent
Topic
Estates and Trusts
Partnerships
Date Issued
11-12-1986
November 12, 1986
Re: Request for Ruling; Estate Tax
Partnership property
Dear *****************
This is in response to your letter of July 17, 1986, requesting that we issue a certificate showing no tax due. The department no longer issues such certificates effective for decedents dying on or after January 1, 1980. However, I have treated your request as a request for a ruling letter.
Facts
For a period in excess of 46 years the decedent,********** and his partner,********* were engaged in the business of purchasing improved real property to be held primarily for rental income and purchasing unimproved real property for investment purposes. Based on the information furnished in the Virginia Estate Tax return and the fact that the partners had filed U. S. Partnership Returns of Income, it is clear that they were engaged in a partnership.
At the time of his death the decedent, who was not a resident of Virginia, and his partner were the owners of several parcels of real estate in Virginia. Title was held in the name of decedent and his partner with no reference to the partnership. The question has arisen as to whether the decedent's interest in the Virginia real estate parcels is real estate, in which case the estate would owe Virginia estate tax, or an intangible partnership interest, in which case the estate would owe no Virginia estate tax.
Determination
Based on the evidence submitted it appears that the parcels were purchased and maintained with partnership funds and that for 46 years the partners have held numerous parcels of real estate in their individual names with the intent that all be considered partnership property.
Accordingly the Virginia parcels of real estate shall be treated as partnership property, and the decedent's interest shall be treated as an intangible asset for purposes of the Virginia Estate Tax. Because the decedent was a nonresident U. S. citizen taxable under §58.1-903, and owned no other property in Virginia, the estate does not owe any Virginia Estate Tax.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner