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A common technique to minimize gift and estate taxes on the transfer of a family business to younger family members may soon be ending.

When an ownership interest in a family business is transferred, its value is usually discounted for lack of control and/or lack of marketability.

The discounts typically range from 30% to 40% of the fair market value of the business.

In August, the IRS issued proposed regulations to eliminate most discounts.

The regulations will be effective 30 days after they are issued in final form.

A public comment period will end on December 1, 2016.

The regulations will be issued in final form, and will likely be effective during the first part of 2017.

The final regulations may be somewhat different from the proposed regulations.

But until the final regulations take effect, taxpayers can take advantage of valuation discounts when transferring ownership interests in family businesses.

If you have questions about valuation discounts or wonder whether you can or should take advantage of them now or in the near future, given the proposed regulations, contact your FOS attorney.