Multilevel valuation discounts: Handle with care

Description

Abstract: Estate planners may use family limited partnerships (FLPs) and family limited liability companies (FLLCs) to consolidate a family’s wealth management, protect assets, and reduce gift and estate taxes. The reductions are made by subtracting lack of control and marketability discounts from the net asset value of the entity’s holdings. This article notes that, in some cases, multilevel discounts are available for tiered entities and uses a hypothetical example to illustrate how a multilevel discount might work. Estate of Astleford v. Commissioner (T.C. Memo 2008-128) Estate of O’Connell v. Commissioner (T.C. Memo 1978-91)