IRS revisits discount techniques for estate planning

The Treasury Department has recently issued Proposed Regulations under Internal Revenue Code Section 2704 that, if enacted as written, would impact the use of discount techniques for estate planning purposes in the context of intra-family transfers of family controlled entities. These discounting techniques have been a staple of estate planning for many years and have been on the radar of the Treasury Department just as long. The Regulations affecting the discounts would become effective 30 days after publication.

These new Regulations are proposed, and there is a commentary period for public response. A number of practitioners have raised the issue that these new regulations may exceed the scope of authority of the Treasury, as they go against established case law. As there is a degree of uncertainty as to the final outcome, anyone contemplating estate planning should be aware of this new situation and should consult their team of professionals.

If you have any questions, contact Roberto Viceconte at rviceconte@rem-co.com or (212) 944-4433, extension 2480.

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