Business Law
Analysis of the New Proposed Regulations Under Internal Revenue Code §2704
by Jeramie Fortenberry, JD, LLM (Taxation) | Executive Editor, WealthCounsel
On August 4, 2016, the Treasury Department issued Proposed Regulations on valuation discounts for family-owned businesses under §2704 of the Internal Revenue Code that eliminate almost all valuation discounts. These proposed changes will significantly impact planning strategies for clients. Your family-owned business clients should take action by year end if they want to achieve valuation discounts under the current rules.
Download this Thought Paper for in-depth analysis of the proposed changes and practical takeaways to help your clients navigate the new rules, including:
- Clarifications about LLCs and other entities that are not corporations or partnerships
- Restrictions on deathbed transfers that result in lapse of liquidation rights and clarification of treatment of assignee interests
- Changes to Treasury regulations regarding liquidation restrictions under §2704(b)
- Changes to the definition of applicable restriction to eliminate comparison to the liquidation limitations of state law
- New disregarded rescissions on transfer of individual interests
- Effect of insubstantial ownership of non-family members
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