Congress Looks to Shut Down Valuation Discounts

Jacob Stein Esq.
July 30, 2009 — 1,526 views  
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As Congress frantically looks for ways to pay for the various stimulus and other wasteful spending proposals, increasing estate and gift taxes seems like a natural solution.  Although these two transfer taxes account for a small percentage of the government's revenues, these taxes are not on the radar screen of the middle class or its defenders.  Consequently, these taxes can be increased with little unwanted attention, especially if the taxes are increased indirectly.

One way to increase a tax indirectly is to increase the tax base (i.e., increase the dollar amount to which the tax will apply).  Currently, Congress is looking at eliminating valuation discounts for gifts of interests in closely held entities, such as limited liability companies and limited partnerships.

Given the current political climate it is likely that they will successfully eliminate valuation discounts.  We strongly advise our clients to act quickly, while the window is still open.  Right now is the perfect time to make gifts to the younger generations.  Values are depressed, interest rates are low and valuation discounts are still available.  You may not find another such perfect set of factors in your lifetime.

Learn more about advaned estate tax strategies by reading our white papers at

Jacob Stein Esq.


Mr. Stein is a partner with the law firm Boldra, Klueger and Stein, LLP, in Los Angeles, California. The firm's practice is limited to asset protection, domestic and international tax planning, and structuring complex business transactions. The firm's goal is to provide the highest quality legal work that is usually associated with only the biggest law firms, in a boutique firm setting. Jacob received his law degree from the University of Southern California, and his Master's of Law in Taxation from Georgetown University. Mr. Stein has been accredited by the State Bar of California as a Certified Tax Law Specialist and is AV-rated (highest possible rating) by Martindale-Hubbell.