Yet another tax reform proposal targets discounts for lack of marketability–at least for non-business assets
The latest tax reform proposal, which Rep. Jim McDermott (D-Wash.) introduced last month as the “Sensible Estate Tax Act of 2011,” would raise the maximum estate and gift tax rate to 55% and lower the applicable exclusion amount to $1 million. It would also eliminate valuation discounts on investment assets, such that: the value of any nonbusiness [...]
Key takeaways from Turner and recent FLP cases
As we recently reported, the taxpayer in Estate of Turner failed to persuade the Tax Court to preserve the discounted value of a family limited partnership (FLP), due largely to the passive character of the transferred assets (marketable securities) and the partnership’s lack of any legitimate, non-tax business purpose, including any overriding investment philosophy. The takeaways [...]
Market says value of S Corps and C Corps differ, says Van Vleet
During the past 25 years, the number of S corporations and LLC’s has mushroomed from 750,000 IRS tax filings to about 6 million, according to Dan Van Vleet (Stout Risius Ross), who spoke at last week’s 2011 ASA Advanced BV Conference. During this same time, C Corp filings have declined from about 2.5 million to just [...]
Lance Hall: It’s a great time for your clients to gift private equity
“Because not only do you not have to pay gift tax, but the discount for marketability has shot up, too,” Lance Hall (FMV Opinions) told the The Wall Street Journal, in the recent article, “How Volatility Eases Estate Planning.” The IRS generally allows a 30% to 35% discount on transfers of private company stock, the [...]
Valuing life insurance policies can be problematic
In a recent Trusts and Estates blog post Melvin A. Warshaw (Financial Architects Partners) says “antiquated gift tax regulations create ambiguity in valuing certain types of newer policies that are sold today.” One example is in the case of gift taxes. Warshaw explains: The estate and gift tax regulations indicate that the value of a [...]
Can the IRS subpoena your work papers, even after the taxpayers have paid the deficiency?
An Idaho couple claimed nearly $1.5 million as a charitable contribution deduction on their federal tax returns relating to the granting of a conservation easement. The IRS summoned the taxpayer’s appraiser to provide evidence related to the easement valuation, including all his work files. Based on advice of the taxpayer’s attorney, the appraiser refused the [...]
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