Important Gifting & Estate Tax Planning Development

Happy September! With the holiday season approaching and the end of the year just around the corner, I would like to give you an update regarding the Proposed Regulations on valuation discounts for family-owned businesses under §2704 of the Internal Revenue Code, which were issued by the Treasury Department on August 4, 2016. Since many of our clients own and operate family businesses, this potential change is extremely poignant.

The Proposed Regulations will undoubtedly impact planning strategies that use restricted interests to achieve valuation discounts for family-owned businesses and will dramatically limit and potentially eliminate discounted transfer opportunities for transfer tax purposes. The Proposed Regulations are as follows:

  • Apply to limited liability companies and address what constitutes control of an LLC or other entity or arrangement that is not a corporation, partnership, or limited partnership.
  • Restrict “deathbed transfers” that result in the lapse of a liquidation right and clarify the treatment of a transfer that creates an assignee interest.
  • Restrict “deathbed transfers” that result in the lapse of a liquidation right and clarify the treatment of a transfer that creates an assignee interest.
  • Restrict “deathbed transfers” that result in the lapse of a liquidation right and clarify the treatment of a transfer that creates an assignee interest.

The IRS has scheduled a hearing on the Proposed Regulations for December 1, 2016, and stated that the final regulations won’t be effective until at least 30 days after they become final. I am taking this opportunity toadvise my clients to take action prior to the end of 2016, in order to take full advantage of the discounted transfer strategies that are currently in place before the Proposed Regulations are finalized in December.

PLEASE CALL OUR OFFICE IMMEDIATELY IF ANY OF THE FOLLOWING APPLY TO YOU:
  • You have been considering estate tax planning (your individual net worth is over $4,000,000 per person)
  • Restrict “deathbed transfers” that result in the lapse of a liquidation right and clarify the treatment of a transfer that creates an assignee interest.
  • You have been considering gifting to your children or grandchildren
CONTACT NM LAW, APC

Phone: (949) 253-0000*

Fax: (949) 682-4804

Email: info@mintocounselors.com*

Address: 15147 Woodlawn Ave, Tustin, CA 92780*

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