GIFT TAX
Business Valuation for Gift Tax
Business valuation services for gift tax covering IRS Form 709 reporting, fair market value of gifted business interests, and adequate-disclosure appraisals that support valuation discounts. Equity Business Valuation Services prepares USPAP-compliant appraisals of gifted C-corporation shares, S-corporation stock, LLC membership interests, and family limited partnership interests nationwide.
Why Gifting a Business Interest Requires a Defensible Appraisal
When you transfer an interest in a privately held business to a family member, a trust, or another recipient, and the value of the gift exceeds the annual exclusion, the IRS requires you to report the transfer on IRS Form 709, the United States Gift (and Generation-Skipping Transfer) Tax Return. The value you report determines how much of your lifetime gift and estate tax exemption the transfer uses, so the number has to be supportable.
To start the three-year statute of limitations on the gift, Treasury regulations require adequate disclosure, which generally means attaching a qualified appraisal that establishes the fair market value of the transferred interest. Our appraisers determine that value using the income, market, and asset approaches consistent with Revenue Ruling 59-60, then document any supportable discounts for lack of control and lack of marketability in a report prepared in accordance with USPAP.
Engagements are quoted as a fixed fee, confirmed before work begins. You can review our business valuation pricing before you request an appraisal.
WHAT WE VALUE
We Appraise Every Type of Gifted Business Interest for Form 709 Reporting
Equity Business Valuation Services prepares qualified appraisals of privately held business interests gifted to family members, trusts, family limited partnerships, and other recipients.
Gifted C-Corporation Stock
Fair market value of gifted shares in privately held C corporations, with control and marketability discounts applied where the facts support them.
S-Corporation Shares
Valuations of gifted S-corporation stock, accounting for the tax attributes and distribution rights that affect value.
LLC & Partnership Interests
Fair market value of gifted LLC membership interests and limited partnership interests, based on the governing documents and market evidence.
Family Limited Partnership Interests
Valuations of gifted FLP and family LLC interests, reflecting transfer restrictions and the lack of control that non-managing members hold.
Minority & Non-Controlling Interests
Analysis of non-controlling positions, including discounts for lack of control and lack of marketability where supportable.
Fractional & Undivided Interests
Fair market value of partial ownership stakes gifted over multiple years in closely held operating companies and holding entities.
HOW IT WORKS
How We Prepare Your Gift Tax Valuation
- 01
Share Your Gift Details
Tell us the business interest being gifted, the recipient, and the intended date of the gift so we can scope the engagement.
- 02
Document Review
We gather financial statements, tax returns, the cap table, and governing documents to establish the basis for value.
- 03
Valuation & Analysis
Our appraisers apply the income, market, and asset approaches, determine supportable fair market value, and quantify any applicable discounts.
- 04
Qualified Appraisal Report
We deliver a signed, USPAP-compliant report with the analysis and support needed for adequate disclosure on Form 709.
CREDENTIALS
Credentialed Business Valuation Appraisers
Our appraisers hold credentials with leading organizations such as the ASA and NACVA, and every report is prepared in accordance with USPAP.
ASA-Accredited Senior Appraisers
NACVA Members
USPAP-Compliant Reporting
COMMON QUESTIONS
Gift Tax Valuation Questions
Do I need an appraisal to report a gift of business interests?
When the value of a gifted privately held business interest exceeds the annual exclusion, you must report the transfer on Form 709. To satisfy the adequate-disclosure rules and start the statute of limitations, the return should be supported by a qualified appraisal establishing the fair market value of the interest gifted. We prepare that appraisal for you.
What is adequate disclosure and why does it matter for a gift?
Adequate disclosure is the Treasury regulation standard for reporting a gift completely enough that the IRS can evaluate it. Meeting it, generally by attaching a qualified appraisal and a description of the valuation method, starts the three-year statute of limitations. Without adequate disclosure, the IRS can revalue the gift years later. Our reports are built to meet this standard.
What valuation standard applies to gifted business interests?
The IRS applies the fair market value standard, the price at which the interest would change hands between a willing buyer and a willing seller, neither compelled to act and both reasonably informed. For closely held business interests, this analysis follows the factors set out in Revenue Ruling 59-60. Our appraisers apply the income, market, and asset approaches consistent with that guidance.
How do valuation discounts apply to a gifted minority interest?
When you gift a non-controlling or non-marketable interest in a private business, discounts for lack of control and lack of marketability may reduce its fair market value below a pro-rata share of the whole entity. We analyze the governing documents and market evidence to determine whether those discounts are supportable and document the basis for any we apply.
As of what date must a gift tax appraisal value the interest?
The effective date of value is the date of the gift, when the transfer is complete. We set the valuation date to match the date of the gift and confirm it with you during scoping so the reported value aligns with your Form 709 filing.
Report Your Gift with a Defensible Fair Market Value Appraisal
Request a USPAP-compliant business valuation prepared to support adequate disclosure on IRS Form 709.