Estate Planning attorney salem beverly marbleheadNewly issued IRS Proposed Regulations signal the “sun-setting” of an important estate tax planning tool.

This week, the IRS issued new proposed regulations that are designed to remove the effectiveness of an important strategy that allows for the discounting of the value of assets for estate and gift tax purposes. Valuation discounting techniques (often through such tools as FLPs and FLLCs) have allowed people to significantly reduce, if not eliminate, their estate and gift tax exposures. The IRS has never been a fan of these techniques. With many taxpayer victories of late, the IRS has taken a different tact to eliminate the effectiveness of such techniques.

This different tact is by eviscerating the use of discounting techniques via new proposed regulations. Although it certainly appears that the IRS will eventually cause the elimination of discounting strategies, there remains a brief window of opportunity to utilize these important tools. The regulations will not be final for several months. And until they are final, discounting is still available. But people that have delayed implementing these techniques must do so now!

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