On August 4, 2016, the IRS released proposed regulations that could significantly impact future gift and estate planning in the context of family-owned entities. The proposed regulations would materially limit the valuation types of discounts in a family-owned entity for gift or estate tax purposes, which are currently being utilized.
The proposed regulations provide that they will be effective on and after the date they are finalized. Although these changes could have a significant impact on future planning techniques and reduce the options available, based on the proposed regulations, there is a window of opportunity to act before the regulations are finalized. However, that time period may be very narrow, as a hearing to address the proposed regulations is scheduled for December 1, 2016.
Because of the uncertainty involved as to what the final regulations will contain and when they will become effective, taxpayers should seek assistance immediately, to take advantage of the current strategies and discounts available for such gifts. Attorneys at Kaufman & Canoles are available to assist clients in navigating these murky waters with the goal of minimizing potential transfer tax liability and also utilizing the current planning options before they possibly become limited or a thing of the past.
If you have a question regarding these important changes or other business entity matters, please feel free to contact a member of the Estate, Trust & Wealth Transfer team.
The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2026.
