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Treasury Department Withdraws Estate Tax Valuation Rules

Tuesday, October 24, 2017

(North American Meat Institute)

The Department of the Treasury (Treasury) formally withdrew proposed regulations regarding valuation of family-controlled businesses for estate and gift tax purposes under Section 2704 of the Internal Revenue Code. The proposed regulation would have treated certain lapses of liquidation rights as transfers occurring at death.

The Treasury, earlier this month, stated the proposed regulations were both "unworkable" and "impractical," and could eliminate valuation discounts in situations where they properly should apply.

In comments filed last year, the Meat Institute stated the proposed changes to estate transfer tax rules would have "eliminated or greatly reduced valuation discounts for lack of control and lack of marketability for family businesses, discouraging families from continuing to operate and build their businesses."

Treasury's recommendations were issued as part of a final report published in accordance with Executive Order 13789, which required the Department to identify and reduce tax regulatory burdens that impose undue financial burdens on U.S. taxpayers or otherwise add undue complexity to federal tax laws.

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