The Treasury Department recently issued long-awaited proposed regulations regarding valuation discounts of interests in corporations and partnerships for estate, gift and generation-skipping transfer tax purposes. If finalized as currently drafted, the proposed regulations would severely limit the potential for taking valuation discounts on the transfer of an interest in a family controlled entity, which will significantly increase the transfer tax cost of transferring interests in such entities. Therefore, we recommend that you consider planning with such entities now before the proposed regulations are finalized.