Tax Update for Family-Controlled Entities

The Treasury Department and IRS recently issued long-awaited proposed regulations that challenge valuation discounts on transfers of interests in family-controlled entities for estate, gift and generation-skipping transfer (GST) tax purposes.

The proposed regulations are clouded with uncertainty, nonetheless they represent a significant threat on the ability to rely upon valuation discounts in the future. Utilizing valuation discounts has long been one of the most effective transfer tax planning techniques for individuals with family-controlled businesses. While the eventual scope and timing of the final regulations is undetermined, the core of what the proposed regulations are targeting is not. For that reason, we encourage you to review how this development may impact you and your family.


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