Matz Quoted on IRS Proposed Rules Affecting Estate Tax Deductions for the Payment of Interest

Partner Kevin Matz was quoted providing comments on the Internal Revenue Service’s (IRS) recently issued proposed estate tax rules that could dramatically reduce the availability of estate tax deductions relating to the payment of interest on loans following a person’s death that are used to fund the payment of estate taxes.

Kevin explained that the IRS proposal seems to be targeting not only actions taken during the course of estate administration (i.e., after a person has died), but also estate planning that a person engages in during his or her lifetime that may produce illiquidity as a by-product.  As Kevin put it, “This strikes me as going too far.”

He noted that individuals may have significant non-tax reasons to structure their business interests in ways that are not liquid in order to ensure that subsequent generations do not sell the businesses that the client has dedicated a lifetime to build.

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