When it comes to the Certain Estate Tax Relief Act of 2009, H.R. 436, there is a vocal majority among BV experts who contend that the bill could bring about the demise of the valuation of fractional interests in family owned investment entities. Nonetheless, it was surprising that our coverage of a position-taking article authored by William Frazier—vice-chairman of the American Society of Appraisers’ Government Relations Committee—prompted one reader to send the following Letter to the Editor:
“I would like to comment on the article regarding proposed changes in estate tax valuation discounts. It appears that [you] assume that we all agree that the law should stay as it is, or at least that discounts should continue. That is an incorrect assumption. I, and a good number of other appraisers I have spoken with, think that the discounts, particularly on family held or family controlled enterprises and FLP’s that own publicly traded investments (especially!!) are discounts that are bad public policy. Many of us see them as artificial discounts, which no rational grandpa would do to his family if he really thought that the total to his kids and grandkids would be diminished by that discount amount. The first question should be what good tax policy should be. You should not assume all your readers agree with you… If its bad policy, we cannot endorse it just because some of us make money executing that poor policy. That, in a public forum, makes us look like all we care about is that we want to make money.”
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