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KayDee Gilkey IRS Proposed Regulation on Discounts
by KayDee Gilkey, click here for bio

Program: Farm and Ranch Report
Date: February 07, 2017

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A last summer proposed IRS regulations to eliminate some or almost all of the discounts that family farms can take via transfer of land or operations appears to either not be moving forward or be reduced from what was originally proposed. Cliftonalleanlarson Principle and Farm CPA Today blogger Paul Neiffer says

Neiffer: “And even if that regulation doesn’t go away, the IRS seems to have already indicated that those discounts will not apply to a closely held business such as a farm operation . However, we ned to be careful as they haven’t defined what a closely held business is and many farm operations have their land in a LLC or a partnership that rents that ground to the farm operation. Well the farm operation is considered a closely-held business but that land-holding entity, which is where a lot of the value is for farmers, that may be considered to be a non-closely held business therefore that farmland holding LLC might be subject to the new regulations on valuation discounts. We don’t think so — but it is just hard to know. I think the bottomline with Trump being our new president is likely that either that new regulation on valuation discounts will be eliminated or drastically reduced so it’s not going to affect our farmers much.”

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