The American Institute of Certified Public Accountants (AICPA) recently published recommendations for a disclosure statement to be included on a U.S. Gift (and Generation-Skipping Transfer) Tax Return (IRS Form 709) disclosing the transfer of an interest in a family partnership or family controlled entity made on the same date or after the issuance of the Internal Revenue Code (Code) Section 2704 proposed regulations.

Under the adequate disclosure rules pertaining to IRS Form 709, if a taxpayer is taking a position that is contrary to proposed regulations, it must be disclosed on the return. In the case of a transfer of an interest in a family partnership or family controlled entity addressed in Code Section 2704 proposed regulations, the adequate disclosure statement should indicate that the Section 2704 proposed regulations were not taken into account in determining the value of the entity at the time of the transfer because, under the effective date provisions of the section 2704 proposed regulations, there is no requirement that the section 2704 proposed regulations be considered.

See AICPA’s new recommendations concerning a disclosure statement. https://www.aicpa.org/interestareas/personalfinancialplanning/resources/taxplanning/downloadabledocuments/suggested_disclosure.pdf