Published on August 14, 2015

According to recent reports, the IRS is working on regulations that would, in effect, increase the value of interests in closely-held entities, such as partnerships and limited liability companies, that are transferred to family members for gift and estate tax purposes. Those entity interests currently are subject to discounts in value for minority ownership and lack of marketability. If the proposed regulations are enacted, those discounts will no longer be available for transfers to family members in many cases.

A decision by the U.S. Treasury on whether to move forward with these new restrictions is expected to be announced this September. If implemented, the changes are expected to be effective immediately.

Therefore, if you are considering making gifts of your interest in a closely-held partnership or LLC to your children or other family members (or to trusts for their benefit), you should act now if you want to take advantage of potential valuation discounts.

Questions?  Contact any attorney in Ryan Swanson’s Estate Planning & Probate Group.