New IRS Regulations on transfers of family business
For many years now, owners of closely-held corporations or partnerships have been able - with bona fide business purpose - to structure the business entity and transfers of business interests to family members so that discounts would be available for gift tax purposes against the value of the interest.
The IRS this week issued anticipated proposed regulations that could result in these discounts being unavailable. Certainly, we need to digest these proposed rules, and they are subject to public comment and review prior to final issue. However, they could be in force as soon as January 1, 2017.
Business owners are encouraged to consult counsel to discuss these new rules and to determine if any action is in order. Once these new rules are in place (whatever form they take) it is likely that these transfers will be less tax-advantaged.
This blog is not intended to constitute, and does not constitute, legal advise to anyone or any specific situation. See also our legal notices.