Contributed By Baker McKenzie S.A.S.
Partial Interest in an Entity Transferred during Lifetime
If a partial interest is transferred during lifetime, it is presumed that the fair market value of the interest cannot be lower than its intrinsic value increased by 30%.
If the partial interest being transferred is received as consequence of gift, the value of the interest is at cost basis.
Partial Interest in an Entity is Transferred after Death
On the contrary, if a partial interest is transferred at death, any amount received as consequence of an estate, legacy, donation or conjugal portion is considered as a capital gain subject to capital gains tax at a 10% rate. The value of the interest is its cost basis.
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