• Our Firm
  • Areas of Practice
    • Estate Planning
    • Probate & Trust Administration
    • Private Client Services
    • Corporate & Business Administration
    • Real Estate Services
  • Attorneys & Paralegals
    • Robin A. Lloyd, Sr., J.D.
    • Emily Helmick, Esq.
    • Brenda Lloyd, CP, FRP
    • Tiffany Coleman
  • News
  • Community
  • Contact

Call us 772-234-5500

Find us on Map
info@rlloydlaw.com
Robin Lloyd & Associates, P.A.Robin Lloyd & Associates, P.A.
Robin Lloyd & Associates, P.A.Robin Lloyd & Associates, P.A.
  • Our Firm
  • Areas of Practice
    • Estate Planning
    • Probate & Trust Administration
    • Private Client Services
    • Corporate & Business Administration
    • Real Estate Services
  • Attorneys & Paralegals
    • Robin A. Lloyd, Sr., J.D.
    • Emily Helmick, Esq.
    • Brenda Lloyd, CP, FRP
    • Tiffany Coleman
  • News
  • Community
  • Contact

Relief from the Now Infamous Section 2704 Proposed Regulations May be on its Way

Relief from the Now Infamous Section 2704 Proposed Regulations May be on its Way

August 15, 2017 Posted by RLA Uncategorized

 

Last Year, the Internal Revenue Service issued proposed regulations aiming to re-define its interpretation of Internal Revenue Code Section 2704, which deals with valuation discounts in valuing interests in Corporations and Partnerships for Estate, Gift, or Generation-Skipping Transfer tax purposes. More specifically, the IRS’ aim was to exclude any discounts attributable to lapsing rights or restrictions on liquidations in determining the value of the interests in Corporations or Partnerships (such as Family Limited Partnerships or LLCs). As was expected, the response and the comments received by the IRS were largely negative, especially from practitioners advocating on behalf of clients with significant closely held family businesses.

Despite the strong opposition, the IRS moved forward with its implementation of the Proposed Regulations on December 1, 2016, and practitioners have been adjusting to this new normal ever since. If you take a position on a return that is contrary to these proposed regulations, the Code requires “adequate disclosure” on the return. At this point, it seems most practitioners are forging ahead under current law and providing the IRS with adequate disclosure of any reporting position contrary to the proposed regulations.

As part of his campaign promise to deregulate Washington, President Trump signed Executive Order Number 13789 asking the U.S. Treasury to reduce the Tax Regulatory Burden. As a result of this executive order, the Treasury has issued a report requesting guidance and commentary as to whether the regulations identified in the report should be rescinded or modified. As you would expect, the Proposed Section 2704 Regulations were among those identified in the Treasury’s report as needing commentary.

This brings to the table the possibility that the Proposed Regulations under Section 2704 could be rescinded or heavily modified. Some commentators believe a concession for valuations applied to actual family businesses is needed (to differentiate between active businesses and business entities established as investment vehicles for wealthy families). Of course, all of this is may be overshadowed by possible tax reform in Washington this fall, the likes of which may or may not retain Section 2704.

As always, we will keep a close eye on the progress of the Proposed Regulations under Section 2704. If you have any questions regarding the applicability of the proposed regulations to your situation, or if you have other questions pertaining to your estate plan, business plan, probate administration, or real estate, please do not hesitate to contact me: bhorner@rlloydlaw.com; (772) 234-5500.

Tags: Businessestate planningestate taxGiftsTaxtax lawWealth Management
0
Share

You also might be interested in

House GOP Tax Bill has Big Plans for Estate Tax

Nov 7, 2017

November 7, 2017 Last week, Republican members of the House[...]

Contracts by Zachary Kleiman, Esquire

Aug 6, 2019

Did you know that certain contracts, such as a sale[...]

Use it or lose it

Oct 5, 2021

The current estate tax and lifetime gift exemption is $11.7[...]

Leave a Reply

Your email is safe with us.
Cancel Reply

Contact Us

We're currently offline. Send us an email and we'll get back to you, asap.

Send Message
Let Us Consult You | Call 772.234.5500

Our Firm

Robin Lloyd & Associates, P.A. is an established firm handling the legal needs of Vero Beach since July of 1990. Robin A. Lloyd, Sr., a Vietnam War veteran, founded the Firm after practicing as a Partner in the Vero Beach office of a 55-laywer firm headquartered in West Palm Beach since 1974. The Firm represents many Clients, including high wealth individuals, and focuses on several different areas of law including, but not limited to: Estate Planning, Probate, Guardianship, Trust Administration, Real Estate, all areas of Taxation, and Business Law.

Contact Us

  • Robin Lloyd & Associates, PA
  • 5089 Highway AIA, Vero Beach, Florida 32963
  • 772.234.5500
  • info@rlloydlaw.com

Get Social

© 2022 · Robin Lloyd & Associates. Site by Squared Studios. | Privacy Policy

Prev Next