The Treasury Department announced yesterday that, under President Trump's executive order, it will withdraw several tax regulations that were deemed burdensome, including proposed regulations under Internal Revenue Code Section 2704. The 2704 regulations would have had, if adopted, a significant impact on the valuation, for gift, estate and generation-skipping transfer tax purposes, of interests in family-controlled entities. If these proposed regulations had been adopted, taxpayers would have lost a highly effective estate planning technique, and the cost of transferring interests in family-owned entities would have increased significantly.
While a Democratic sweep in a future election could pave the way for the return of the 2704 regulations, taxpayers contemplating the transfer of interests in family-owned businesses have reason to celebrate, at least in the short-term.
Please contact Lara M. Sass, PLLC to determine what steps should be taken to move forward with succession planning and to take advantage of the minority and other discounts currently available.