This is an estate tax strategy designed to make $1.00 of assets look like $0.75 (or less) for tax purposes. It works. It is usually done with fractional ownership or family limited partnerships.
The door’s going to close on this strategy. H.R. 436 brings into play the possible elimination of this strategy.
The strategy is particularly good because the VIX (S & P volitility measure) is through the roof right now. That means higher valuation discounts.
It is a good way to unwind asset positions at a reasonable tax cost. You’re going to spend money. You’re going to add some complexity to your life. But your tax savings will be a bonus multiplier number that will make you happy.
Go. Do.
Phil Hodgen
Philip D. W. Hodgen is the principal attorney of HodgenLaw PC, an international tax law firm based in Pasadena, California. He earned his undergraduate degree from Claremont McKenna College and his law degree from the School of Law at the University of California, Los Angeles. He then went on to earn a Master of Laws degree with a specialty in taxation from the University of San Diego School of Law. Admitted to the California bar in 1982, Phil spent nine years in law firms and with a large U.S. bank before starting his own firm in 1991.
Phil is a past chair of the International Tax Committee of the State Bar of California's Tax Section and was a member of the Executive Committee of the State Bar of California's Tax Section for 2004-2007. Phil frequently speaks on a variety of international tax, trust and estate topics to attorneys, accountants, and real estate professionals.
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Tax laws change over time, and the information in this post above may be less accurate today than it was at the time of the last revision. This post is not tax advice for your specific situation. Please contact an international tax professional to get personalized advice for your situation.
