New PPP Transfer Rules May Limit Use of Estate-Planning StrategiesNew PPP Transfer Rules May Limit Use of Estate-Planning Strategies

As the end of 2020 approaches, along with the possible end of an $11.58 million per taxpayer estate and gift tax exclusion, planners and their clients must decide whether and how to make transfers by gift, sale or a combination thereof, especially given the possibility of a presidential victory for Joe Biden and Democratic congressional candidates. Planners have many options, but Notice 5000-20057 (the Notice), issued on Oct. 2, 2020 by the Small Business Administration (SBA), may limit the ability of Paycheck Protection Program (PPP) loan borrowers to take advantage of these transfer strategies.

Biden 2-Step

In view of the risk of a lower estate tax exemption, which could take place effective Jan. 1, 2021,¹ many planners are in the proces...