IRS targeting FLPs – Proposed regs endanger valuation discounts for family-controlled entities

Description

Abstract: In August 2016, the IRS released its long-anticipated proposed regulations limiting the ability of family limited partnerships and other family-controlled entities to take advantage of valuation discounts. If the regulations are finalized as proposed, they’ll make it difficult, if not impossible, for these entities to use certain lapsing rights and liquidation restrictions to “devalue” interests for gift and estate tax purposes. This article details the proposed regs. A sidebar offers alternative estate planning strategies.