The flipside of H.R. 436: Another source of new work?

BVWireIssue #79-2
April 8, 2009

BV experts are well aware of the potential threats posed by H.R. 436: Certain Estate Tax Relief Act of 2009. As previously noted, the proposed bill would amend the Internal Revenue Code of 1986 to “repeal the new carryover basis rules in order to prevent tax increases and the imposition of compliance burdens on many more estates than would benefit from repeal, to retain the estate tax with a $3,500,000 exemption, and for other purposes.” Notably, for gift and estate tax purposes, the bill would also disallow lack-of-marketability discounts for non-business assets when there is a transfer of an interest in an entity that is not publicly traded.

Still, at last week’s Wealth Forum 2009 conference in New York City, Jonathan Rikoon, a partner with Debevoise & Plimpton in New York City and chair of the law firm’s Trusts & Estates Department, echoed a contention offered by other speakers: Because of the prospect of H.R. 436 becoming law, “There’s never been a better time in history to make gifts to family members.” This, of course, could mean new work for BV experts, lawyers, accountants, and other tax professionals.

An interesting point: One attendee asked if H.R. 436, if enacted, would be retroactive. According to Rikoon, such would not be the case. Normally, changes are signaled because bills specifically say effective at the date of introduction, he told attendees. H.R. 436 does not include this stipulation.

Please let us know if you have any comments about this article or enhancements you would like to see.