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Passing on the Family Business Under the Restrictive Estate Freeze Rules

Passing on the Family Business Under the Restrictive Estate Freeze Rules The Revenue Act of 1987 and the Technical and Miscellaneous Revenue Act of 1988 have effectively eliminated the preferred stock recapitalization and other estate freeze techniques. Instead of helping small businesses and individual tax payers by simplifying the tax structure and lowering tax rates, it has become impossible for many small business people to pass on the family business because of prohibitively high estate tax rates, encouraging owners to sell to outsiders, and forcing heirs to sell the family business to raise funds to pay the estate tax. This article examines these provisions and suggests some planning opportunities for small business owners. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Journal of Business Emerald Publishing

Passing on the Family Business Under the Restrictive Estate Freeze Rules

Helga B. Foss
American Journal of Business , Volume 6 (1): 4 – Jan 1, 1991
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References (1)

Publisher
Emerald Publishing
Copyright
Copyright © 1991 MCB UP Ltd. All rights reserved.
ISSN
1935-5181
DOI
10.1108/19355181199100003
Publisher site
See Article on Publisher Site

Abstract

The Revenue Act of 1987 and the Technical and Miscellaneous Revenue Act of 1988 have effectively eliminated the preferred stock recapitalization and other estate freeze techniques. Instead of helping small businesses and individual tax payers by simplifying the tax structure and lowering tax rates, it has become impossible for many small business people to pass on the family business because of prohibitively high estate tax rates, encouraging owners to sell to outsiders, and forcing heirs to sell the family business to raise funds to pay the estate tax. This article examines these provisions and suggests some planning opportunities for small business owners.

Journal

American Journal of Business – Emerald Publishing

Published: Jan 1, 1991

Keywords: Stock recapitalization; Estate freeze; Tax structure; Family businesses; Estate tax rates

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