Is This the End for Valuation Discounts in Family Wealth Transfers?
Insight Melinda Fellner Bramwit · Lisa Weinstein Burns · Filmore E. Rose · Scott D. Ross · Duncan Connelly · September 29, 2016
Wealthy families for decades have been successfully utilizing illiquid, minority interests in business entities such as family limited partnerships (FLPs), family limited liability companies (LLCs), and closely-held corporations to transfer wealth to the next generation or beyond at significantly discounted valuations. These entities commonly hold closely held business interests, real estate, or other investment assets, including portfolios of publicly traded securities. The IRS for years has attempted to limit the estate and gift tax saving benefits of this popular estate planning technique under existing law, with little success. However, the Treasury (IRS) recently issued proposed new regulations aimed at cracking down on the use of valuation discounts that may end the use of minority discounts for transfers of interests in family controlled FLPs and LLCs. Learn more here