Estate Tax Change and Family Business
President Bush's plan to repeal the estate tax could mean fewer acquisitions of family-owned businesses by large corporations says UAB finance professor Lance Nail, Ph.D. He predicts changes in estate tax laws will have a major impact on the number of these transactions in future years. "I expect to see fewer family-owned businesses being sold. Under current estate tax law and under certain circumstances, the tax burden to sell a family-owned business is lower than if the business is passed on to the next generation, due to the preferential tax treatment of capital gains over inherited assets above the exempted amount." This perverse tax incentive should be rectified with the repeal of the estate tax, and more families will have the incentive to retain their businesses.
Contact Jennifer Park, Media Relations, 205-934-3888 or [email protected].
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