Law & Order

U.S. Treasury Upholds Family Discount Valuations for Estate Taxes

By SEMA Washington, D.C., Staff

The U.S. Treasury Department reversed a 2016 proposal to limit family-owned businesses’ use of minority and marketability discounts when calculating the estate tax under Section 2704 of the Internal Revenue Code. SEMA joined with many other organizations in opposing the 2016 proposed rule. The regulation threatened to raise the estate tax for a family-owned business by 30% to 50%. The minority interest and marketability discounts recognize that family beneficiaries usually can’t sell the inherited income at the valued rate when it is a family-controlled business. 

For 2017, the lifetime exclusion against the federal estate tax is $5.49 million ($10.98 million for couples), with a maximum tax rate of 40%. 

For more information, contact Stuart Gosswein at