valuation discounts

IRS Issues Proposed Regulations to Valuation Discounts on Gift or Estate Transfers of Interests in Family Controlled Entities


The Department of Treasury issued Proposed Regulations on August 2, 2016 in an attempt to significantly reduce or eliminate minority or lack of control discounts and quite possibly suppress marketability discounts for Family Controlled Entities, regardless of whether the Entity is an active business or not.

Proposed regulations provide guidance concerning Treasury’s interpretation of a Code section. The public is given an opportunity to comment on a proposed regulation and a public hearing may be held if a sufficient number of requests to speak at a hearing are received.

A public hearing is scheduled for December 1, 2016. Treasury has indicated that most of the new rules would not be effective before 30 days after the Regulations have become final. Thus, if adopted, the provisions would likely become effective next year.

We anticipate the Proposed Regulations will draw significant opposition from Estate, Tax, & Valuation Professionals during the public hearing phase.


Proposed Actions:

As a result of the Valuation Discount uncertainty, those who are contemplating gift transfers of Family Controlled interests should strongly consider accelerating such transfers to 2016.

As always, our tax & valuation specialists are available to consult with you on these matters.



We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

About UsOur Team | Events | Careers | Locations

Toll-Free: 866.577.0780Privacy Policy | All Content © Lutz & Company, PC 2021