Proposed Regulations Elimination of Valuation Discounts

The IRS recently published proposed regulations, detailing its desire to curtail the use of valuation discounts used to transfer interests in family-controlled entities. These valuation discounts typically have allowed family members to receive the business at a reduced gift and estate tax cost. The new valuation rules will apply regardless of whether the business is active. A public hearing is scheduled for December 1, 2016, and shortly after, the rules will be published in final form. The valuation rules will apply to transfers occurring after the final form is published.

See Trusts and Estates Group Client Alert: Proposed Regulations Aim to Eliminate Many Valuation Discounts, Milbank, August 4, 2016.