~~I have previously written several blog posts on the possible new attack by the IRS on valuation discounts for transfers of family farm entity interests. The IRS got numerous letters from farmers and advisors around the US on this issue and it appears that the IRS may have listened.
Catherine Hughes who is an Estate and Tax attorney-advisor for the IRS spoke at the mid-year American Bar Association meeting and indicated that the new valuation regulations would not apply to "closely-held" business such as farm operations. However, what has not been confirmed is what is the definition of a closely-held business. Most of our farmer clients should qualify, but the IRS will likely need to update their regulations to indicate how to determine this type of business.
The good news is that these new regulations (they may not even get issued) will likely not affect hardly any of our farmers. The regulations were originally designed to go after taxpayers who stuff $1o million of Apple or Google stock into an LLC and then try to take a 35% discount on this transfer. We do not have many farmers who are in those shoes.
I will keep you posted as final regulations come out (or if they get pulled, whichever comes first).