Just in time for Halloween, the IRS has announced that the plan to put a stake through the heart of the estate and gift tax killer technique known as “discounting” is no more. As you may recall, I wrote a post last year alerting readers that a time-honored technique to minimize estate and gift taxes was at risk. The technique utilized the transferring FLP or FLLC interests at an amount that is significantly discounted for transfer tax purposes than that of the underlying asset values.
In its spooky laboratory, the IRS had created a proposed regulation that would have sent the technique into oblivion. Since then, the technique had been in the land of the undead as good people scrambled to implement the technique before the IRS had put a final nail in the coffin when the proposed regulations became finalized.
Then last week, the IRS had a change in heart. It was announced that the proposed regulations had been sent back to the dimension from whence it came when the IRS withdrew the proposed regulations.
So now discounting techniques are no longer at risk and are back from the dead, much to the happiness of taxpayers.