The IRS is expected to issue regulations this fall that will substantially limit the use of family limited partnerships and family limited liability companies. These entities are often used as a method to gift assets to children and other family members at discounted values, often as much as 40%.
It appears that the regulations will limit or completely eliminate the ability to apply certain discounts to gifts, such as minority interest and lack of marketability discounts.
The regulations are expected to be issued around Labor Day and would be effectively immediately. It is therefore imperative that taxpayers act immediately before the estate planning and wealth transfer opportunities of family entities disappear or are restricted.
About the Author
Mark S. Samila, a Partner at Kahn, Dees, Donovan & Kahn, LLP, in Evansville, Indiana, is a business attorney, Indiana Registered Civil Mediator and Licensed Certified Public Accountant (Missouri) whose practice includes tax and estate planning, financial services including bank and bond financing, creditors’ rights, workouts and bankruptcy and business law. Mark blends his accounting and financial background with his legal experience. In so doing, he provides legal analysis and also understands and considers the business and financial implications of a client’s legal options.