Treasury Releases Proposed Regulations to Section 2704

The long-awaited and much-speculated about regulations to Section 2704 were issued in early August 2016. As issued, the proposed regulations expand the scope and reach of section 2704 to preclude use of various structural techniques to artificially suppress the value of interests in entities transferred by taxpayers or owned by them at death. The IRS is likely to receive a great deal of commentary from the estate planning and valuation communities, respectively. Therefore, the final form of these regulations is difficult to predict at best. In the meantime, taxpayers who are considering wealth transfer have ever more reason to put their plans into motion.