Beth Kaufman Weighs in on Possible Changes to Valuation Discounts in Bloomberg Law

Estate planners are keeping a close eye on the Treasury Department’s agenda, anticipating the possible revival of several regulatory projects shelved by the Trump administration.

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Valuation Discounts

Estate planners are particularly interested in whether the new administration revives a project to limit the use of valuation discounts that reduce the value of assets held in closely-held family businesses for estate and gift tax purposes.

The discounts are typically applied to compensate for the lack of marketability and control that can make the assets harder to sell. A 2016 IRS proposal (REG-163113-02) sought to place limitations on these discounts to stem perceived abuses, but they were later withdrawn by the Trump administration—a move heralded by trade groups and Republican lawmakers who opposed the regulations for being overly broad.

Beth Shapiro Kaufman, a member in the Washington office of Caplin & Drysdale, said she could see the Biden administration proposing a more tailored version of the rules. Kaufman formerly worked as associate tax legislative counsel in Treasury’s Office of Tax Policy.

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