Assets for Gift and Estate Tax Planning

We are experts in the valuation of assets for gift and estate tax planning. We use the latest available information regarding transactions of similar entities and quantitative discount models to determine the fair market value of partnership interests. We work closely with our clients' legal and financial advisors to ensure that our work is conducted in a professional, timely, and economical manner.       With constant and often complex changes in the estate and gift tax code, it is crucial to have a professional valuation team assists in capturing all of the business owners’ potential tax savings. The goal of Estate and Gift Tax Planning is to adequately provide liquidity for the owner’s estate; provide for continuation of the business and to minimize gift, estate and generation-skipping transfer taxes.       

For high net worth individuals holding real property and marketable securities, a valuation is essential to preserve their assets for future generations.      A business owner’s needs for estate planning will vary over the owner’s life cycle. In the early years, buy-sell agreements and insurance protection are typically the highest priority. As an owner progresses in their life cycle then transfer planning, and possible charitable giving, become more prominent in their estate planning needs.       

An estate tax planning valuation needs to be clear about the interests being valued. Discounts from net asset value must be documented. The fair market value of a limited partnership interest and the value of a limited partner's pro rata portion of the partnership's net asset value are not equal; this difference is commonly referred to as a “discount”. The use of the Family Limited Partnership vehicle combined with appropriate discounting can significantly reduce the estate and gift tax burden on asset transfers between family members.

We Perform Discounts Studies for:

•Family limited partnerships    

•Limited liability companies    

•Partial ownership interests in assets such as real estate, business, or plant       

These reports include discounts for lack of control and marketability, as well as blockage discounts for ownership of securities in publicly held corporations.       All gifted or bequeathed assets must be assigned a value for federal transfer tax purposes. Consequently, the determination of such value serves critically to the estate planning process. Many estate and gift planning techniques are subject to intense scrutiny by the IRS, and any undervalued assets may be subject to tax penalties. Penalties are less likely to be levied if a valuation has been performed in good faith by an independent third party appraiser. A qualified appraisal prepared by a competent professional appraiser helps establish a "reasonable basis" for the valuation.

Other Techniques

Other commonly used estate planning techniques include:      

charitable remainder trusts,  charitable lead trusts, private foundations, private annuities, generation-skipping trusts,    Grantor-Retained Annuity Trusts (GRAT), Qualified Personal Residence Trust (QPRT), annuity trusts.       

Our reports document the methods used to arrive at these discounts to comply with the IRS guidelines described in Revenue Ruling 59-60. Each situation is different and a valuation professional needs to carefully consider which discounts apply and to what extent.       

Our analysts have extensive experience in preparing and supporting valuations for tax purposes. We perform extensive independent research and draw on years of industry experience to provide the most supportable, well reasoned analysis possible.       

Our valuations have withstood the scrutiny of the IRS and other third parties.       

The following are some of the tax related issues we assist our clients with:    

•Valuations of closely held businesses interests and FLPs in support of gift or estate tax returns    

•Valuations of securities donated to a charity    

•Valuation of common stock for stock option issued to employees - Nonqualified deferred compensation – Sec. 409A    

•Determination of built-in gains tax – Subchapter S and Sec. 382    

•Valuations of underlying Real Estate Assets    

•Valuations of Plant, Machinery & Equipment Assets