August, 2016
By Gary Pittsford, CFP®
President and CEO, Castle Wealth Advisors, LLC

On August 2, 2016 the Treasury Department issued proposed Regulations under Internal Revenue Code Section 2704 and if adopted in their present form, it would eliminate most of the minority discounts for all closely-held businesses.

If these new regulations are implemented in 2017, then our ability to discount minority interest in family corporations, family limited partnerships, limited liability companies and other entities would be eliminated for family transfers.

This new regulation will affect parents wanting to gift small percentages of stock to their children. It will also have an impact on all estate planning and documents being prepared for individuals that have a net worth over $5,450,000 each, or a married couple with $10,900,000.

During the next 90 days the IRS is accepting comments from all interested parties and a hearing has been scheduled for December 1, 2016. If these new regulations are adopted then the discounts on business values for family transfers will be affected in early 2017.

Obviously, we will be watching what happens the next 90 days.

All of us at Castle Wealth Advisors® will be monitoring this situation closely. If any purchasing cooperatives, franchisors, or families that we are working with have any questions, please contact any of our Senior Partners.