Anti-estate freeze rules can have wide scope
Article Abstract:
Estate planners must consider planning to avoid the unfavorable valuation rules in IRC sections 2701 to 2704. These rules were designed to prevent estate freezing. Section 2701 is structured to neutralize the estate freeze and covers business interest transfers. Section 2702 covers trust interest transfers, or estate-freeze-like transactions conducted through non-corporate transfers. Section 2703 is aimed at buy-sell agreements, which lock in the estate tax value of a share in a corporation by obligating the decedent's estate to sell at below fair market value. . Section 2704 disregards lapsed rights and restrictions in valuing shares.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1993
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Structuring buy-sell agreements to fix estate tax value
Article Abstract:
Carefully structured buy-sell agreements can be used to fix the value of an estate for estate tax purposes. Six requirements must be met before the fixed value of shares will be recognized. These requirements are best met using a formula approach to determine value and arm's length negotiations that establish non-monetary considerations for the eventual transfer. Possible structures for such buy-sell agreements are discussed.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1995
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Valuing indirectly held real estate has special concerns
Article Abstract:
Indirectly held real estate can cause valuation problems for gift and estate taxation. Estate planners should reconsider the traditional discounts for valuation when real estate partnerships or holding companies are involved. Types of discounts to analyze include investment company, market absorption, trapped taxes, marketability and key man.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1993
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