On November 10, 2021, the Tax Court issued a Memorandum Opinion in the case of Smaldino v. Commissioner (T.C. Memo. 2021-127). The primary issues presented in Smaldino were whether (1) the proper characterization for gift tax purposes of petitioner’s purported transfer of LLC class B member interests to Mrs. Smaldino followed by her purported retransfer of these same interests to the Dynasty Trust and (2) the fair market value of the LLC class B member interests that petitioner transferred, directly or indirectly, to the Dynasty Trust. Executive Summary of Smaldino v. Commissioner After practicing for a time as a certified public accountant and serving as the treasurer of a computer company, the petitioner Louis “Jumbo” Smaldino,[1] purchased his father’s liquor store business, which he then operated for over 35 years. He eventually expanded his business holdings to include apartment buildings, which he managed as a sole proprietor. By 2008 he…