Lee R. Schroeder is an Ohio licensed attorney with Schroeder Law LLC in Ottawa. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at [email protected] or at (419) 523-5523. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.
Before the end of 2016, the IRS is expected to issue a new regulation that will significantly affect gift and estate taxes for many family businesses. Traditionally certain family-owned businesses are considered valuable due to the respective businesses’ synergy. So if one sibling wants to sell his 1/5 share of a $5 million business, his individual share would be worth less than $1 million. This concept is referred to as discounting for lack of marketability and lack of control. It’s often used in farm and business succession planning to keep things fair among heirs as well as to continue the viability of family businesses and farms. But now the IRS will be cracking down on discounts for lack of marketability and lack of control in one area: estate and gift tax calculations.
The nuances of federal tax laws, including specific deadlines and details on how certain laws will be enforced or administered, are carried out by the Internal Revenue Service through “regulations,” which have the force and effect of law.
The IRS is expected to issue a new regulation before the end of the year that is expected to significantly affect gift and estate taxes for many family businesses.
Read more about this change in tax law and how it could affect you in Lee’s article in the Lima News here: Legal-Ease: Impending tax law change impacts family businesses
Source: LimaOhio.com, “Legal-Ease: Impending tax law change impacts family businesses,” by Lee R. Schroeder, August 27, 2016