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August 26, 2016

Estate Planning Alert – Proposed Regulations May Eliminate Valuation Discounts – Adverse Impact on Gift and Estate Tax Planning

On August 2, 2016 the Treasury issued long anticipated proposed regulations that, if adopted in their current form, are structured to eliminate almost all discounts for interests in closely held family entities (partnerships, corporations and LLCs). If valuation discounts are eliminated, gift tax and estate tax planning for families could be adversely impacted.

A hearing has been scheduled regarding the proposed regulations on December 1, 2016. The Treasury has stated that the regulations won’t be effective until at least 30 days after they become final. It is possible that the regulations will become final during early 2017. Because of the proposed regulations potentially detrimental impact, taxpayers should consider taking action during 2016. This applies to taxpayers who currently hold closely held family entity interests or want to form such entities.

Please contact Stacey Brennan, Stuart List or Kent Silvester if you have any questions regarding this recent development.

Legal disclaimer: The information in this article (i) is provided for general informational purposes only, (ii) is not provided in the course of and does not create or constitute an attorney-client relationship, (iii) is not intended as a solicitation, (iv) is not intended to convey or constitute legal advice, and (v) is not a substitute for obtaining legal advice from a qualified attorney. You should not act upon any of the information in this article without first seeking qualified professional counsel on your specific matter.