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Author: Thomas J. McLaughlin

2704 Regulations Explained: Proposed Rules Are Set to Further Expand Value Differences between Family-Controlled Entities and Other Companies

September 28, 2016 2704 Regulations

The IRS is focused on reducing valuation discounts associated with transfers of interests in family-controlled businesses, but this focus will result in family members being deemed to receive a different value than non-family members. This also means that an appraiser will be required to establish two different values based on…

2704 Regulations Explained: Winners and Losers of Proposed §2704 Regulations, Is the IRS a Loser?

September 13, 2016 2704 Regulations

The recently issued proposed regulations under Code Section 2704 are specifically targeted at substantially reducing valuation discounts associated with family-controlled businesses. The clear losers are the families that have taxable estates. These families will likely pay additional estate and gift tax once the §2704 regulations are finalized. In order to…

2704 Regulations Explained: Why is the IRS Targeting Valuation Discounts on Family Controlled Entities?

September 6, 2016 2704 Regulations

The simple answer is that the IRS believes that valuation discounts taken on family-controlled entities are falsely high, which results in lower transfer tax revenue to the Treasury. With the foregoing in mind, it is important to understand how the IRS, courts, and taxpayers value a business interest under current…