Families with interests in closely held entities such as corporations, limited liability companies and limited partnerships have long benefitted from reduced estate, gift and generation-skipping transfer tax exposure due to valuation discounts. If regulations proposed by the Internal Revenue Service are adopted in their present form, however, most valuation discounts will no longer be available for intra-family transfers.
An owner of an equity position in an entity who can neither control the entity nor find a ready market for sale of the interest cannot force liquidation or sell that equity position for its liquidation value. Accordingly, for transfer tax purposes that equity position has traditionally been valued at a discount to the pro rata value of the underlying entity assets.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]