William H. Frazier
The valuation of fractional interests in family-owned businesses and investment entities faces possible extinction.
There are two possible executioners: Congress and the Treasury Department.
In the House of Representatives, the threat comes in the form of the Pomeroy bill. Introduced by Democratic Congressman Earl Pomeroy of North Dakota on Jan. 14, 2009, H.R. 111-436 seeks to eliminate the use of valuation discounts in valuing family limited partnerships (FLPs). The bill, formally known as “Certain Estate Tax Relief Act of 2009” also seeks to eliminate the use of minority interest discounts for family businesses.
The effect would be to end the use of the FLP as an estate-planning vehicle.
The Treasury is considering making...
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