Tax Regulations: New IRS Estate/Gift Tax

Recently, the IRS has proposed new regulations that would close certain estate and gift tax loopholes that deal with the transfer of business interest among family. If approved this would mean increased estate taxes on the death of owners of family businesses. The anticipated timetable for these tax regulations could come as early as January 1, 2017.

Currently taxpayers are able to structure these types of transfers so that the individual transferees lack the power to liquidate or control the entity in order to reduce transfer taxes. Since the transferees do not have controlling interest or liquidation rights the value of the transfers for tax purposes are discounted typically 30-50%.

Taxpayers have long used this strategy to understate the fair market value of their assets for estate and gift tax purposes but it is now in danger of coming to an end. The process can take several months so clients who are planning on transferring interest in family-controlled entities should consider doing so as soon as possible. Regardless of what you are looking for out of a CPA firm, please contact us today so we can assist in maximizing the inheritance to your family. We have years of experience and are here to help.

-Ankit R.


CAPATA is a full-service accounting firm located in Laguna Niguel in southern California.

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