The proposals probably will prompt more business owners to act in the next few months, he says.
“The minority discount is based in economic reality, and its loss will subject taxpayers with taxable assets to higher taxes,” says Renn.
The Treasury Department published the proposed change Aug. 2 and it is now subject to a 90-day comment period after which the comments will be reviewed. Hearings are set for December. Thirty days after the regulation is finalized it will go into effect.
Treasury considers the current regulation allowing the discount to be a loophole used in aggressive tax planning and wants to close it.
“By taking advantage of these tactics, certain taxpayers or their estates owning closely held businesses or other entities can end up paying less than they should in estate or gift taxes,” Mark J. Mazur, assistant secretary for tax policy in the Treasury Department, said in a statement.