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T&E TALK:  Proposed Regulations Demand Review of Your Estate Plan

Posted by Scott T. Ditman, CPA/PFS on Aug 15, 2016 1:00:00 PM
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Proposed regulations issued by the Treasury Department and IRS on Aug. 2 would significantly limit the ability to use valuation discounts in the context of transferring interests in family-owned entities to family members. This technique has been frequently used to minimize gift and estate taxes. The new regulations would include active businesses owned by a family, including real estate operating companies.

The proposals are already facing opposition by tax practitioners, taxpayers, and other advisors who argue that the IRS has overstepped its authority and ignored state law by issuing these regulations.  A public hearing is scheduled for Dec. 1, 2016, and the new valuation rules could go into effect 30 days following the hearing.

So what does this mean to you?

  • If you are planning a transaction or are interested in making intra-family gifts and sales to reduce the estate tax payable at death, take action now.
  • Even if you are not currently planning a transaction, review your estate plan with your advisor in light of these proposed regulations. It is critical to evaluate your liquidity needs at death – without the ability to take these valuation discounts, your estate taxes may be higher than anticipated. This review will help you evaluate alternative steps to take.

Should you have questions about these proposed regulations and would like to review your estate plan, contact me at or your Berdon advisor.

Scott T. Ditman, a tax partner and Chair, Personal Wealth Services at Berdon LLP, New York Accountants, advises high net worth individuals and family/owner-managed business clients on building, preserving, and transferring wealth, estate and income tax issues, and succession and financial planning.

Topics: T&E TALK

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