Estate & Gift

An ownership interest in a closely-held business can be the most significant asset in a business owner’s estate.  

For estate planning purposes or transfer tax purposes, determining the value of this ownership interest can be challenging and involves consideration of many factors.  Any valuation report, whether it is for an estate tax filing or for a gift, is subject to IRS review and must meet the requirements of being a “qualified appraisal.”

In addition, adequate consideration must be given to the factors set forth in the Treasury Regulations and in Revenue Ruling 59-60.  The selection of the valuation methodology will depend on the facts and circumstances in each case, and, in general, the following approaches to value will be considered: income approach, market approach and asset approach.

Based on the degree of ownership interest, consideration must be given to various discounts and issues including “key man” and non-competition agreements, built-in capital gains, minority vs. majority ownership and marketability of the block of interest being valued.
  
EisnerAmper’s valuation experts possess the credentials required to be classified as qualified appraisers.  When challenged by the IRS, our valuation team will meet and defend the valuation on the client’s behalf, and we provide testimony at trial if a settlement cannot be reached. Our professionals possess a thorough knowledge of valuation methodology and best practices in preparing valuations for estate and gift tax filings.  

A representative example of the types of engagements for which we perform tax related valuations may include:

• Transferring ownership interests in a closely held business and establishing appropriate discounts for gift and estate matters.
• Satisfying the tax reporting requirements relating to charitable contributions of equity interests.
• Determining the value of common stock for the purposes of issuing stock options to employees in accordance with the standards compliant with Section 409A.