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New Opposition to Estate Tax Rule from Presidential Administration Could Affect Business Owners with Wealth

October 9, 2017

The Treasury Department is currently evaluating a proposed regulation that could change how wealthy business owners are eligible to pass on businesses to their children or other heirs. individuals are currently able to discount valuations of stakes in a family owned business to minimize the taxes due upon transfer. business estate plan

A 40% levy could be applied to estate values greater than $5.49 million. The proposed rule under section 2704 of the Tax Code could eliminate these business valuation discounts and therefore, a critical tax planning strategy that has been referenced by many people who own businesses and are extremely wealthy. According to Treasury Secretary, the IRS and the Treasury believe that these regulations should be completely withdrawn and believe that the rule is unworkable.

The primary aim under the previous presidential administration that created the rule was to prevent people who had a great deal of wealth to put marketable securities into their company much like a limited partnership and then transfer those securities at a discounted valuation. The IRS interpreted this as gaming the systems. As a business owner, you’ll likely have concerns about protecting not just your individual interests, but your business interests, too. Having an estate and transition plan for both is important.

If you have further questions about how to protect your business assets and to do so legally, contact a New Jersey estate planning lawyer today.


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can be of assistance.

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listings and become a part of an amazing team.

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Listen in, Join the Conversation!

Recent Posts
Do You Owe The AMT?

American educational reformer Horace Mann called education “the great equalizer.” In football, it’s been said ...

See more
What is the Value of Your Business?

In the second quarter of 2023, more than 2,300 small businesses were sold. The median ...

See more
Immediate vs. Deferred Annuities

Despite not being as well known as some other retirement tools, annuities account for 6.5% ...

See more