In its final report on burdensome tax regulations, the Treasury Department has called for the withdrawal of Obama-era valuation rules that family business owners said would wreak havoc on their legacy plans. The proposed rules, issued in August 2016, “Restrictions on Liquidation of an Interest for Estate, Gift and Generation-Skipping Transfer Taxes” under Section 2704, would have curbed valuation discounts and meant increased estate taxes on the deaths of owners of family businesses. The Treasury has now concluded that “the proposed regulations’ approach to the problem of artificial valuation discounts is unworkable.” The report says that Treasury plans to publish a withdrawal of the proposed regulations in the Federal Register shortly.
So, it’s back to business as usual for the rich and their estate planners. “The regs were mucking up an area that was already difficult to navigate,” says Richard Dees, an estate attorney with McDermott Will & Emery. Families can go back to wealth transfer planning using discounts without the fear of the 2704 regs looming. Still, you don’t want to be too aggressive, he says.
So, it’s back to business as usual for the rich and their estate planners. “The regs were mucking up an area that was already difficult to navigate,” says Richard Dees, an estate attorney with McDermott Will & Emery. Families can go back to wealth transfer planning using discounts without the fear of the 2704 regs looming. Still, you don’t want to be too aggressive, he says.
