Estate and Gift Valuation

Obtaining a reliable third-party opinion of value is an important part of successful estate planning strategy and execution.  Following the standards of our profession expected by the I.R.S., we have successfully documented hundreds of transfers for estate and gift tax compliance purposes.

Our valuation experience in a broad cross-section of industries and services and for all types of interests include the following:

Valuation of minority and controlling interests in closely held businesses
S corporation valuations
Family limited partnerships and limited liability companies
Fractional interest valuations
C to S conversions
Dealing with tax-related controversies

In particular, our experience includes:

Buy/Sell-Shareholder Agreements

 We have extensive experience assisting clients and attorneys in crafting the valuation provisions of shareholder agreements, the result of years of working with agreements that caused conflict upon the exit of a partner.  Valuation clauses in these agreements are critical, and we can help. 

Family Limited Partnerships & Family Limited Liability Companies

The valuation of family limited partnerships and family limited liability companies is a rapidly-changing landscape.  Tax court cases continue to impact many issues that affect the drafting of these complex agreements. 

A tutorial on Valuation Discounts and analysis of Chapter 14 and Section 2036 can be found by clicking this Valuation Discounts power-point.

The IRS has released Appeals Coordinated Issue Settlement Guidelines for FLP’s.  To see what the IRS has to say about this important topic, click here.

Subchapter S Corporations

Valuation of Subchapter S Corporations is one of the most controversial issues in business valuation today.  We are nationally known experts, having been involved in leading the discussion since the “Gross case” that brought this issue to a head.  For more information on this timely valuation topic, click here. 

 Other issues affecting Estate and Gift Valuation

 Many other issues continue to affect the estate and gift valuation landscape.  Recent rulings on consideration of subsequent events are crucial to proper valuation. 

C Corporation cases involving the deductibility of taxes for built-in gains also continue to be an issue.  The most recent case dealing with this issue is the reversal of the Jelke decision by the 11th Circuit (Estate of Jelke et v. Commissioner, 05-15549, U.S. Court of Appeals for the 11th Circuit, Nov. 15, 2007).  This decision was a major victory for taxpayers, allowing a full discount for the built-in gains tax of the C corporation, where the lower court had allowed only a present-value over an assumed liquidation period. 

In addition, the Tax Court has soundly endorsed the use of qualified appraisers in the case of Kohler v. Commissioner (TC Memo 2006-152, July 15, 2006.) 

Practice Issues in Estate and Gift

Practitioners should be aware of the Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Services rules set forth by Circular 230.

In addition, the Pension Protection Act, signed into law in 2006, changed the statutory definitions of qualified appraiser/appraisal, and gave the IRS new powers to sanction appraisers.  For a summary of the rules changes by Michael Crain, former chair of the AICPA BVFLS Committee, click here.