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IRS proposes significant changes to estate and gift tax rules.

In August, the U.S. Treasury Department released a set of proposed regulations making changes to Section 2704 of the estate and gift tax valuation discounts. The proposal would impose significant new tax costs on family-owned businesses, making it harder for family owned and operated businesses to transition to the next generation.

AFS is working with the Family Business Estate Tax Coalition (FBETC) and the National Association of Manufacturers (NAM) on this issue. AFS recently signed onto a coalition letter to the Dept, of Treasury, Secretary Jack Lew, urging the withdrawal of new estate tax regulations, which was sent the week of Sept. 26.

In order to understand how the new proposed rule will impact small, family owned metalcasting facilities and suppliers, input was sought on the following:

* How does your succession plan use valuation discounts to help pass on the business? If your business has already survived one generation, were valuation discounts useful in that transfer?

* Background on your company-how long has your business been open, who founded it, how many employees do you have, where do you operate?

* How will the proposed rule affect your succession plan and the transfer of your business?

* If the rule change increases your estate tax liability, what will that do to your employees? Reduction in workforce, benefits, or wages? Slower future growth?

* Could this change potentially cause the liquidation of the business to pay estate or gift taxes?

Forward your comments to ssalmon@afsinc.org.

For additional information, contact Stephanie Salmon, AFS Washington Office, 202/842-4864, ssalmon@afsinc.org.

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Title Annotation:ON THE HILL
Publication:Modern Casting
Date:Oct 1, 2016
Words:257
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