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IRS Proposed Regulations May Impact Estate Planning for Family Businesses

IRS Proposed Regulations May Impact Estate Planning for Family Businesses

This summer, the IRS proposed new regulations that may have a significant impact on estate planning for family businesses.  Some commentators claim that the regulations amount to a total elimination of marketability and minority discounts for closely-held businesses, which are common and beneficial tools used in transferring a family business from one generation to the next. 
Responding to the backlash and flood of comments on the proposed regulations, the IRS issued informal statements explaining that the purpose of the proposed regulations is to stop excessive discounts, but not to eliminate such discounts entirely.   While these informal statements are not binding, they indicate that the proposed regulations are likely to be modified, or at least clarified, prior to being adopted.
Experts are predicting that it will take at least several months for the IRS to refine and finalize new regulations.  Once new regulations are adopted (if at all), business owners will have 30 days to take action before the regulations are effective.
The bottom line is that there is no need to panic.  However, if you are part of a family business considering how to transfer it to the next generation, now is a good time to take action and make sure you have a plan in place.
Call Gevurtz Menashe today to talk to one of our experienced estate planning attorneys and learn more about how these proposed regulations may impact you and what you can do to plan for your business.  To schedule a consultation, call our Portland offices at (503) 227-1515, our Vancouver offices at (360) 823-0410, or contact us online anytime.

Taylor S. Kittell is an Associate and Estate Planning Attorney at Gevurtz Menashe. She is a member of the Oregon and Washington state bars and focuses her practice exclusively on estate planning issues including wills and revocable trusts, estate and gift taxes, probate administration, asset protection planning, and beneficiary and trustee representation.