Estate and Gift Tax

A common reason business owners need to have their business or family limited partnership (or LLC) appraised is for gift and estate tax purposes. Ownership interests in closely held entities must be valued when transferred as a gift or as part of an estate. Under this scenario, the recognized standard of value is “fair market value,” defined as the amount at which the ownership interest would change hands between a willing buyer and a willing seller, where both parties have reasonable knowledge of the relevant facts. In addition to other valuation standards, valuation reports must meet the valuation guidelines established under Revenue Ruling 59-60 for gift and estate tax purposes. Valuation discounts for lack of control and lack of marketability are often applied when valuing minority interests in closely held entities under the fair market value standard. These valuation discounts, however, are often challenged by the IRS. To help minimize these challenges, it is critical to engage a valuation firm that can provide a professionally-prepared, supportable valuation report.

Overview

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3000 Wilson Boulevard

Suite 220

Arlington, VA 22201

571.447.5400

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