New IRS Regulations That Will Affect Estate Planning
On August 2, 2016 the Internal Revenue Service released proposed regulations under Section 2704 of the Internal Revenue Code that significantly curtail, and in many cases, eliminate the opportunity to use valuation discounts when valuing transfers between family members of interests in family-controlled entities when the interests are a minority interest or subject to restrictions on liquidation.
The opportunity to use valuation discounts is still available until the regulations become effective. The proposed regulations could be finalized and effective as early as 2017. The valuation discounts will still be available until the end of 2016. If you have a family-controlled business or entity and intend to transfer interests to other family members, please contact us to discuss how you can take advantage of the opportunity to use valuation discounts before the proposed regulations are finalized.