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Proposed Regulations Limiting Discounts on Family Gifts Targeted for Reform

By:  Amanda Wilson

Last summer, we discussed the IRS’s issuance of new Proposed Regulations under Section 2704 of the Internal Revenue Code, which regulations would severely impact discounts on gifts made to family members.  (Our prior discussion can be found here.)   Earlier this year, the Trump Administration issued an executive order instructing the Treasury Department to review all significant tax regulations issued after December 31, 2015 and identify any regulations that impose an undue burden on taxpayers.  The Treasury Department and IRS have completed this review, and have identified eight burdensome regulations that should be reformed.  The good news for taxpayers is that the Proposed Regulations under Section 2704 are on this list. read more

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IRS Proposes Regulations to Limit Strategy to Avoid Estate Tax

By Jason Palmisano

The IRS has issued a notice of proposed regulations to limit the valuation discounts individuals have been afforded when they engage in certain types of intra-family transfers involving their family owned corporation or family partnership.  Under the proposed regulations, the valuation discount — sometimes up to 40% — that is given for the transfer of assets that have limited liquidation rights would not apply for “deathbed” transactions, only to transfers that occur more than three years before the transferor’s death.  While the proposed regulations are very specific, the restriction on the valuation approach could apply to the inheritance of most family businesses.  You can read more about the proposed rules the IRS wants to implement in the Wall Street Journal. read more

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America’s Un-American Resistance to the Estate Tax

By Jason Palmisano

Stephen Martin wrote an interesting article in The Atlantic magazine arguing for bolstering the U.S. federal estate tax as it “is a policy that actually aligns neatly with the U.S.’s notion of fairness.”  I take issue with some of his arguments but he brings up many interesting items for discussion; especially in this election year.  Mr. Martin is a former managing director at J.P. Morgan Private Bank and is currently a writer based in Houston.  You can read the article here. read more