News & Analysis as of

Family Businesses Proposed Regulation

Rivkin Radler LLP

Partnership Losses on Related Party Sales – The IRS Provides Some Clarification

Rivkin Radler LLP on

Few individual owners of a closely held business would be surprised if you explained to them that the IRS and the Federal courts generally will subject many transactions between certain “related” persons to heightened...more

Davis Wright Tremaine LLP

Proposed Regulations Might Affect Family Owned Businesses' Employment Practices

California's Fair Employment and Housing Council (FEHC) has proposed draft regulations that incorporate the use of automated-decision systems (ADS) such as artificial intelligence and machine learning into existing rules...more

Davis Wright Tremaine LLP

Family Business Owners, Gift Away! – No “Clawback” Issue!

When Congress enacted tax reform in December 2017, federal gift and estate tax “basic exclusion amount” (often referred to as the “gift and estate tax exemption”) increased to $10 million per person (from $5 million), indexed...more

Cole Schotz

IRS Withdraws Proposed Code §2704 Regulations On Lapsing Rights And Restrictions

Cole Schotz on

The IRS has withdrawn the controversial proposed regulations under Code §2704 that would have significantly affected the use of discounts in US estate planning. Code §2704 provides that certain “applicable restrictions” on...more

Baker Donelson

Treasury to Withdraw Controversial Section 2704 Proposed Regulations

Baker Donelson on

The Treasury Department announced on October 2, 2017 that it plans to withdraw proposed regulations under I.R.C. Section 2704 ("Proposed 2704 Regulations") that would have reduced or eliminated certain valuation discounts for...more

Tucker Arensberg, P.C.

IRS and Treasury Department Announce Withdrawal of Proposed 2704 Regulations

Tucker Arensberg, P.C. on

On October 4, 2017, in its Second Report to the President Identifying and Reducing Tax Regulatory Burdens the U.S. Department of the Treasury announced that it is recommending the complete withdrawal of the proposed 2704...more

Lowndes

Treasury Plans to Pull Unpopular Discount Regulation

Lowndes on

As discussed earlier this summer, Treasury and the IRS identified as a burdensome regulation the Proposed Regulations under Section 2704 of the Internal Revenue Code, which regulations would severely impact discounts on gifts...more

McGuireWoods LLP

Ron Aucutt’s “Top Ten” Estate Planning and Estate Tax Developments of 2016

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In an always-anticipated annual tradition, Ronald Aucutt, a McGuireWoods partner and co-chair of the firm’s private wealth services group, has identified the following as the top ten estate planning and estate tax...more

Jackson Walker

Time to Transfer Early Stage Investments?

Jackson Walker on

New rules may stop “cheap” transfers of business interests to kids and grandkids. Proposed IRS regulations that may be effective as early as the end of 2016 are designed to severely limit use of discounts on gifts or sales...more

BakerHostetler

Possible Congressional Action May Undercut Proposed 2704 Regulations

BakerHostetler on

Republicans in the House of Representatives and the Senate have introduced bills to derail the Proposed Regulations under Section 2704 of the Internal Revenue Code (“Proposed Regulations”), including bills to (1) nullify the...more

Skadden, Arps, Slate, Meagher & Flom LLP

IRS Proposes Regulations That Would Increase Wealth Transfer Taxes in Family-Controlled Entities

The Internal Revenue Service (IRS) proposed regulations on August 2, 2016, under which transfers to family members of interests in family-controlled entities — including partnerships, limited liability companies (LLCs) and...more

BakerHostetler

Proposed Regulations Under IRC Section 2704 Seek to Eliminate Discounts on Transfers of Family Business Interests

BakerHostetler on

On Aug. 2, 2016, the Treasury Department and the Internal Revenue Service released proposed regulations under Internal Revenue Code (Code) section 2704 (the “Proposed Regulations”). The Proposed Regulations, if finalized in...more

Goodwin

IRS Proposes Valuation Discount Regulations: Implications for Family-Controlled Businesses

Goodwin on

IRS issues new proposed rules aimed at eliminating valuation discounts for transfers of interests in family-controlled entities. Clients considering making transfers of interests in such entities should act soon....more

Bradley Arant Boult Cummings LLP

Proposed Tax Regulations Limit Availability of Valuation Discounts to Family Business Owners

For family business owners who desire to transfer ownership of part of their business to the next generation, the valuation of the business interest is often an important factor to consider. This is especially true for family...more

Burr & Forman

IRS Proposes New Rules Designed to Restrict Valuation Discounts in Family Transfers

Burr & Forman on

Partnerships and LLCs are common choices of entity for family-owned businesses, due to their flexibility and the many uses to which they can be put – including pooling of family assets, succession planning, asset protection,...more

Tucker Arensberg, P.C.

Proposed 2704 Regulations: Significant Impact on Valuation Discounts for Family Businesses

Tucker Arensberg, P.C. on

Background: On August 4, 2016, the Treasury Department and Internal Revenue Service issued proposed regulations addressing the valuation of certain business interests for federal estate, gift and generation-skipping tax...more

Faegre Drinker Biddle & Reath LLP

Discounts for Transfers of Interests in Family-Controlled Entities May Be Limited Severely Under IRS Proposal

The Internal Revenue Service has issued long-anticipated proposed regulations under Section 2704 of the Internal Revenue Code. These proposed regulations are broad and far-reaching. If the proposed regulations are finalized...more

Dechert LLP

Proposed Treasury Regulations Regarding Valuation Discounts for Transfers of Family-Controlled Entities, if Enacted, Would Apply...

Dechert LLP on

After years of anticipation, the U.S. IRS recently issued Proposed Treasury Regulations that would, if enacted in their current form, substantially eliminate most valuation discounts for family-controlled entities and result...more

Katten Muchin Rosenman LLP

Proposed Regulations Under Internal Revenue Code Section 2704: Changes May Be Coming to Transfers of Closely Held Business...

On August 2, 2016, the Treasury Department issued proposed regulations under the authority provided in Section 2704(b) of the Internal Revenue Code (the "Code"). These proposed regulations were much anticipated by the estate...more

Greenberg Glusker LLP

Transfers of Family-Controlled Business Entities to Family Members Could Get More Expensive

Greenberg Glusker LLP on

Transfers of Family-Controlled Business Entities to Family Members Could Get More Expensive - The Internal Revenue Service (IRS) recently released proposed regulations that will dramatically change the valuation of...more

Burr & Forman

Family-Controlled Businesses -- Tax Targets Again: Newly Proposed 2704 Regulations and Presidential Candidates' Positions

Burr & Forman on

It's August of an election---year, and not just any election---year, a presidential election year. So, in less than 80 days, we'll all go to the polls and elect a new president. While Benjamin Franklin might have been right...more

Butler Snow LLP

Owners of Family Controlled Entities Must Act Quickly in Light of New IRS Regulations Attacking Valuation Planning

Butler Snow LLP on

Chapter 14 of the Internal Revenue Code consists of four Code Sections (Sections 2701 – 2704) designed to close valuation loopholes. Prior to Congress’s enactment of Chapter 14 in 1990, estate planners had a host of tools...more

Dickinson Wright

The End to Discounts for Transfers of Interests in Family Business Entities

Dickinson Wright on

The ability to use transfer and liquidation restrictions in legal documents to reduce the value of an interest in a family-controlled (or “closely-held”) business entity (e.g., partnership, corporation, limited liability...more

Holland & Knight LLP

Proposed Treasury Regulations Would Severely Limit Valuation Discounts

Holland & Knight LLP on

Earlier this month, the U.S. Department of the Treasury unveiled its long-awaited proposed regulations targeting valuation discounts commonly used in estate planning, thereby overturning decades of settled law. As drafted,...more

Goulston & Storrs PC

Proposed Rules Would Limit Valuation Discounts for Family Controlled Entities

Goulston & Storrs PC on

On August 2, 2016, the Internal Revenue Service proposed regulations that would severely limit valuation discounts for lack of marketability and lack of control that taxpayers have historically applied for federal gift,...more

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