With the world in flux and an unprecedented shutdown of the
world's economy, those who were planning to transfer businesses
to the next generation have been given what is (hopefully) a
once-in-a-lifetime opportunity to defer additional taxes for many
years. As valuations of investments and businesses — both
public and private — have reduced sharply, unless you are in
the hand sanitizer business, right now is arguably the best time
ever to freeze one's estate.
ESTATE FREEZE
Since capital gains tax is imposed at the time of death, owners
of closely held corporations are assessed a capital gains tax on
the growth of their shares on their terminal return. The idea
behind an estate freeze is to limit the tax payable upon death by
limiting the growth of the taxpayer's interest in the company.
It is not that we want to freeze the taxpayer's business
itself. Rather we want to stop the growth of the taxpayer's
shares while allowing the business (and somebody else's
