We strongly encourage you to act quickly and contact us sooner than later so that we can assist to take advantage of tax planning strategies before year-end and employing valuation discounts in wealth transfer plans.
Client Memo – Estate Planning
Two weeks ago the IRS issued proposed regulations that are aiming to eliminate the long-held practice of valuation discounts for lack of marketability and control for fractional ownership interests transferred by gift, sale, or at death to family members. Valuation discounts are commonly utilized for estate planning purposes when transferring family-owned businesses and can greatly enhance the effectiveness of the current $5.45 million exemption per taxpayer. The IRS has requested comments on these regulations by the first of December and could seek to make them final early next year. The IRS has long opposed and challenged these valuations discounts in court and has been unsuccessful. Therefore they are seeking to revise an existing code section to grant the authority to curtail discounting. We believe that there will be challenges to the IRS authority but are not certain whether it will delay or prevent the implementation of the final regulations. Until final regulations are issued, valuation discounts are still permitted.
Disclaimer: The information contained in this publication is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. In no event will Fishman, Block + Diamond, or its partners, employees, or agents, be liable to you or anyone else for any decision made or action taken in reliance on the information in this website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.