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Managing Multiple Businesses with a Section 6166 Election

Estates seeking to defer the payment of estate tax under Section 6166 need to count their business holdings and dispositions of those holdings carefully.

Source: Estate Planning, Vol. 44, No. 12

By Michael Kosnitzky, Rebecca M. G. Zuks

Article

By Michael Kosnitzky, Rebecca M. G. Zuks

11.29.17

This article was originally published in the December 2017 issue of Estate Planning magazine.

Since its inception in 1916, with the exclusion of the year 2010, Congress has imposed a federal tax on the transfer of certain property interests at death. Generally, this federal estate tax is due nine months from the decedent’s death.

At historic marginal rates reaching as high as 77 percent, the federal estate tax can cause devastating consequences to illiquid privately held businesses. For estates that primarily consist of closely held businesses, Section 6166 may be the only way to avoid a forced sale to pay the tax.

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Tags
Tax, Trusts & Estates, Private Client & Family Office, Litigation – Trusts, Estates and High Net Worth