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IRS proposal could increase tax liability for transfer of family interest in businesses.

The Internal Revenue Service (IRS) released its proposed regulations on estate, gift and generation-skipping transfer taxes and restrictions Treasury in August that may have a significant impact on family businesses' succession plans and make it harder for family owned businesses to transition to the next generation. These changes proposed to section 2704(b) would remove legitimate valuation discounts for estate, gift, and generation skipping taxes which businesses have used for the past two decades in order to prevent the IRS from overvaluing their businesses at death.

These regulations are still in draft form; however, if implemented as currently proposed, these regulations could have a significant impact on the ultimate determination of the fair market value of an intra-family ownership interest relied upon for estate and gift tax purposes.

A public hearing on these proposed regulations has been scheduled for December 1,2016, beginning at 10 a.m. in the Auditorium, Internal Revenue Building, 1111 Constitution Ave., NW, Washington, D.C. 20224.

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Title Annotation:ON THE HILL
Publication:Modern Casting
Date:Sep 1, 2016
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