Estate and Gift Tax Changes Coming in 2016?
New rules would limit the practice of discounting value of minority stakes in family businesses.
The Wall Street Journal, Wednesday August 3, 2016, page A3 reported that the U.S. Treasury Department and the IRS are planning to introduce new regulations aimed at estate and gift transfers of closely held family businesses. The new rules would limit the practice of discounting minority stakes in closely held family owned businesses because of restrictions on an owner’s ability to sell their piece of the business. Estate and gift taxes apply at a top rate of 40% above the $5.45 million per person exclusion, and $10.9 million lifetime exclusion for married couples.
According to the WSJ article, Republican presidential candidate Donald Trump wants to eliminate the estate tax, and Democratic presidential candidate Hillary Clinton says she would propose returning to an estate tax exclusion of $3.5 million per person and a $1 million gift tax exemption and a 45% tax rate.
Stay tuned and we’ll let you know how this plays out.