Family-owned businesses and partnerships are often the most valuable asset an individual has in their estate. The plan to transfer wealth from one generation to the next is a major goal that can benefit children and grandchildren.

Establishing the fair market value of a closely held business is critical for all concerned parties at it relates to estate and gift tax planning . This area of business ownership and subsequent valuation analysis has seen consistent shifts in standards and regulations ranging from IRS codes, estate tax rates, permissible thresholds for gifts to individuals and statutes for an array of factors influencing value – including discount rates. It is important that business owners and their heirs work with experts in business law, tax accounting and appraisal on the latest regulations both now and into the future. 

Due to the complexity and scrutiny that comes with tax related valuation matters, it is advised the valuation analysis only deliver comprehensive, detailed valuation reports that adhere to IRS business valuation guidelines. Ultimately, the valuation report needs to convince the audience, such as a Tax Court or the IRS, that the data, reasoning, defensibility and comprehensive analyses is reasonable and can be supported. Some of the key sections needed in this report include  financial statements and analysis, valuation approaches and methods used, macro and micro economic trends for the company’s industry, adjustments to tangible and intangible asset values, the appraiser’s representation, the conclusion of value, accreditations of the appraiser and appendixes with supporting details. 

Our business valuation partners are qualified and well-versed in the complexities and regulations that must be met upon a business owner’s death and the subsequent business ownership transfer to the owner’s estate. We will ensure you only work with accredited experts with a thorough understanding of  tax and gift related matters and the valuation of a closely held businesses and partnerships. 

For a more comprehensive understanding of the critical role a business valuation plays support gift and estate taxes, checkout the following resources:


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