IRS Proposes New Rules for the Valuation of Interests in Estate, Gift and Generation-Skipping Transfers

On August 2, 2016 the U.S. Department of the Treasury announced proposed regulations regarding changes to the special valuation rules for valuing intra-family transfers of interests in corporations and partnerships subject to lapsing voting or liquidation rights and restrictions on liquidation.


This is an attempt to rein in estate valuation adjustments and add a new category of restrictions that would be disregarded in valuing transfers of family interests.  It is generally applicable to gifts of and estates that contain closely held businesses.


Commentators have suggested that these changes may eliminate the ability to take adjustments for minority interest ownership and perhaps lack of marketability in these entities.  It may be prudent to review your estate plan and consider the impact of intra-family transfers before these regulations are made final.


There is a 90-day window for written and electronic comments and a public hearing has been scheduled for December 1, 2016.  The regulations will not go into effect until the comments are carefully considered and then 30 days after the regulations are finalized.


We will continue to monitor these regulations and any further changes that occur. Please contact us for further discussion on how these changes may affect your estate planning.




Steven P. Kaplan, CPA, JD, LLM
Senior Tax Advisor

Steve Kaplan has led the estate and trust practice at Sax for 35 years. Specializing in sophisticated estate and income tax planning techniques, Steve handles corporate, individual, fiduciary, and estate tax matters of varying complexities.

Steve holds a BS degree in Accounting from Brooklyn College, a Juris Doctor degree from Brooklyn Law School, and a Masters of Law degree in Taxation (LLM) from New York University.


Elizabeth M. Trantina, CPA, JD, LLM

Senior Tax Manager

Elizabeth Trantina is a Senior Tax Manager at Sax. She has more than 20 years of experience in estate and income tax planning for individual, fiduciary and estate tax clients.

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