IRS threatens to eliminate discounts on transfers of family business interests
On Aug. 2, 2016, the IRS released proposed regulations under Section 2704 of the Internal Revenue Code. If adopted, the proposed regulations will significantly reduce the availability of valuation discounts in transferring interests in family entities, including limited partnerships and limited liability companies.
Under current law, the IRS allows valuation discounts for intra-family transfers of interests in family-owned businesses to account for lack of control or lack of marketability. To learn more about how this may change, click here.
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