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Urgent Alert - Last Chance to Lock in Discounts 
We previously contacted you regarding the potential loss of discounts for transfers  of interests in family-owned entities (such as FLPs).  On August 2, 2016, the IRS issued proposed regulations which will eliminate most of the valuation discounts that help reduce gift and estate taxes for wealthy individuals.  
 
Please be aware of the impact of these new rules: 
  • The opportunity to do "squeeze" planning will go away once these proposed regulations become final.  With current valuation discounts, an FLP holding assets worth $100 might be valued at just $65, allowing you to transfer those FLP interests to children or to a trust and only use $65 of your lifetime exemption.   
  • Clients that created an FLP but have not yet transferred the FLP interests out of their estates (out of their names) have not locked in the discounted value.  If you die with the FLP interests in your estate, the value of those interests for estate tax purposes will be at or near the full $100.  To lock in the discounted $65 value before your death, you must transfer the FLP interests out of your estate before these proposed regulations become final. 
A window remains for planning. According to the terms of the proposed regulations, they could go into effect soon after a public hearing on December 1, 2016.  This provides a window for clients to undertake discount planning under current law before the new regulations become effective.  If you may have a taxable estate in excess of $10 million, we encourage you to contact us now to discuss how these new regulations may affect your estate tax situation. 
  
We anticipate that we will have a high volume of affected clients, so please do not delay.  For more information, click on this link: Click Here

Marvin Blum 
 
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THIS MESSAGE IS FOR EDUCATIONAL PURPOSES ONLY.  NOTHING HEREIN SHALL CONSTITUTE LEGAL ADVICE BY THE BLUM FIRM, P.C.  ANY TAX ADVICE CONTAINED IN THIS EMAIL IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF (I) AVOIDING PENALTIES UNDER THE INTERNAL REVENUE CODE OR (II) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TRANSACTION OR OTHER MATTER ADDRESSED HEREIN.  EACH CASE VARIES DEPENDING UPON ITS FACTS AND CIRCUMSTANCES.  ANYONE SEEKING TAX ADVICE SHOULD CONSULT WITH HIS OR HER TAX ADVISOR.