Join ARSA Ask ARSA Pay ARSA

IRS Proposes Significant Restrictions to Estate Tax Discounting Rules

On Aug. 4, the Internal Revenue Service (IRS) issued a notice of proposed rulemaking (NPRM) restricting the discounting of shareholder stock in family-owned operations for the purpose determining federal estate tax liability. Under current law, married couples are allowed $10.9 million in a lifetime exclusion for federal estate and gift taxes. Assets above the threshold are taxed at a 40 percent federal rate.

Traditionally, the IRS and the courts, for purposes of the federal estate and gift taxes, have permitted the valuation of privately-owned business interests to include a “lack of control” and “lack of marketability” discount because some stakes are worth less since they are harder to sell or represent a minority interest. The proposed rule, which applies to corporations, partnerships and limited-liability companies, disregards any restrictions on liquidation or redemption an heir uses to claim a valuation discount if that restriction either lapses after the transfer or the heir or heir’s family has the ability to remove the restriction after transfer. The IRS is also seeking to eliminate the lack of control discount to assignees.

The agency is accepting comments on its proposal until Nov. 2 and will host a public hearing in Washington, D.C., on Dec. 1.



More from ARSA

Review FAA’s Methods, Techniques, and Practices

The FAA has engaged industry to help review AC 43.13-1B Acceptable Methods, Techniques, and Practices—Aircraft Inspection and Repair that is applicable to aircraft inspection and repair. The AC primarily supports…Read More

FAA/EASA MAG Change 10 Released

On June 20, ARSA learned of the publication of change 10 to the Maintenance Annex Guidance between the FAA and EASA, which is issued under bilateral agreement between the United…Read More

Drafting Regulatory Purpose into Order 8130.21

On June 17, ARSA and the Aircraft Electronics Association (AEA) jointly submitted a rewrite of the FAA’s Draft Order 8130.21J, “Completion of FAA Form 8130-3 under 14 CFR part 21.”…Read More

ARSA Leads D&A Action at EASA-FAA Conference

ARSA Executive Vice President Christian Klein joined global aviation regulators and industry leaders in Cologne the week of June 9 for the annual EASA-FAA Safety Conference. Klein attended to present…Read More

Correct STC Oversight Problems

STC holders should take advantage of summertime opportunities to highlight FAA oversight issues to government auditors. Congress’ May 2024 reauthorization of the FAA, required the Department of Transportation’s Office of Inspector…Read More
ARSA