Proposed IRC Section 2704: Potential Impacts on Estate and Gift Valuations

October 2016 PDF (121 pages)

BVR (editor)

Business Valuation Resources, LLC

The proposed IRC Section 2704 regulations, one of the most discussed valuation topics of the year, have triggered strong reactions from the business valuation and legal professions. The controversial proposed regulations are designed to eliminate or greatly reduce valuation discounts for family-owned entities for transfer tax (estate, gift, and generation-skipping) purposes.  Many in the business valuation community feel that the proposed regulations introduce a new standard of value, with an unknown definition, that goes against years of accepted valuation theory and Tax Court precedent. With a possible effective date as early as 2017, now is the time to understand these potential changes and how to respond quickly. BVR's new special report, Proposed IRC Section 2704: Potential Impacts on Estate and Gift Valuations, sheds light on the proposed regulations and helps appraisers navigate the possible implications on the valuation of private business entity interests for transfer tax purposes.

Extra: BVR is following the proposed regulations closely. We will report on the public hearing, which is scheduled for Dec. 1, as well as any other developments related to the proposed regulations as they unfold. With your purchase of this special report, you will receive these news updates via email as soon as they are released.

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Additional Detail

Highlights of the report include:

  • Better understand the potential changes IRC Section 2704 regulations could have on the valuation profession. With a possible effective date of 2017, now is the time to fully comprehend the impact that IRC Section 2704 regulation changes could have and how to react to and articulate your response. This new report distills some of the interpretations down into several main points that will likely be the thrust of written comments to the IRS and testimony at the December 1 hearing

  • Get expert guidance on how to navigate the proposed regulations when valuing private business entity interests for estate, gift, and generation-skipping purposes. This new report breaks down the proposed regulations with practical examples on how the new rules would affect valuations of private business entity interests for transfer tax purposes

  • Understand IRC 2704 from different perspectives. Get a comprehensive list of resources at your fingertips when considering the implications of IRC 2704, including a link to the full copy of the proposed regulations and a bibliography of other articles and resources on the topic

Table of Contents

  • Introduction: (Andrew Dzamba)
  • Chapter 1:  The IRS’ Proposed Section 2704 Regulations: The Impact on and the Future of Estate and Gift Valuation (Curtis Kimball and Z. Christopher Mercer)
  • Chapter 2:  Experts Size Up Controversial IRS Estate Valuation Regs
  • Chapter 3:  Proposed Sec. 2704 Regs Fly in the Face of BV Theory and Tax Law (Ronald D. Rudich)
  • Chapter 4:  Groundswell Builds as IRC Sec. 2704 Regs Sink In
  • Chapter 5:  Valuation Implications of the Proposed Changes to Section 2704, (Z. Christopher Mercer)
  • Chapter 6:  Proposed Regulations Related to Section 2704 and the Case for Applying FLP Valuation Discounts (Weston Kirk and Curtis Kimball)
  • Chapter 7:  Resources and Other Information