PODCAST: COVID-19 Presents Opportunities for Gift and Estate Tax Planning

Published on: 05/28/2020 By: GSG

GSG’s Director of Business Valuation and Litigation Support, Chuck Faunce, discusses gift and estate tax planning opportunities presented by the COVID-19 pandemic.

The COVID-19 pandemic has resulted in a major hit to the value of many businesses. Although business owners might not be thinking about it right now, the damaging effects resulting from COVID-19 have created opportunities for gift and estate tax planning.

COVID-19 has caused business value to decline due to the compounding effects of lower revenues, profits and cash flow, at least in the short term, and lower valuation multiples due to the increased level of economic uncertainty.

Lower values allow business owners to transfer larger ownership interests in the business within annual and lifetime exclusion amounts, and incur potentially lower tax obligations on transfers of ownership interests whose value is beyond those limits.

Also, the current historically low interest rate environment makes certain planning techniques particularly effective.

The negative effects of the COVID-19 pandemic are likely to be temporary, and both business values and interest rates are likely to go up in the future. Business owners who want to make the most of the gift and estate planning opportunities presented by the pandemic should act now and consult with their legal, tax and valuation advisors.

For more information regarding gift and estate tax planning strategies in today’s climate, contact us.

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