Take Advantage of Family Discounts Now

The Treasury Department has long maintained it has theauthority under Internal Revenue Code § 2704(b)(4) to restrict or eliminate valuation discountsfor transfers of interests in family-controlled entities, and Obama’s new budgetproposal echoes this sentiment. 

Traditionalplanning techniques use “valuation discounts to enhance the transfer of wealthto heirs with little or no gift or estate tax consequences.”  The absence of the perennial proposal torestrict or eliminate intra-family valuation discounts in the TreasuryDepartment’s “Greenbook” signals the likelihood of proposed § 2704 regulations.  Therefore,estate planners should promptly take advantage of valuation discounts before any regulations are enacted.

See Gordon A.Schaller & Scott A. Harshman, The“Death Knell” for Family Discounts?, Jeffer, Mangels, Butler &Mitchell, LLP, Apr. 24, 2013.