Recent Webinar on the Proposed Changes to Section 2704

Z. Christopher Mercer, FASA, CFA, ABAR, CEO and Founder, presented a webinar, Proposed Changes to Regulations Under IRS Code Section 2704 Issued August 2, 2016: A Webinar Regarding the Proposed Changes from Business and Valuation Perspectives, on September 26, 2016.

The express goal of the Proposed Changes is to eliminate, or virtually so, valuation discounts in family partnerships (and operating companies, as well). The instruments of change are a loosened definition of control (to broaden the number of families having control), almost total family attribution of control for every transfer, and a hypothetical put right to the partners in family partnership to facilitate the elimination or reduction of valuation discounts in fair market value determinations.

A review from business and valuation perspectives finds that the Proposed Changes, if adopted as published, will affect, but not eliminate valuation discounts.

The webinar covered the following:

  • The concept of control
  • “Applicable restrictions”
  • “Disregarded restrictions”
  • The put right
  • Fair market value?
  • Hypothetical appraisals
  • An example from the Proposed Changes

To view the webinar, click here.

For more information about the Proposed Changes, see our whitepaper on the topic.