The End of Valuation Discounts in a Family Business Context?

Current valuation methodology for gift and estate tax purposes often includes discounts for privately owned businesses.  Modern estate planning sometimes includes packaging investments into a family-owned investment pool that would be subject to discounting, which can and have ranged from 15 to 50 percent. The Department of Treasury has proposed new regulations that are likely to eliminate almost all valuation discounts in a family business setting. A public hearing will be held on December 1, 2016. Family business owners should carefully consider whether to act now while valuation discounts can still be considered for family-related transfers.