Gift & Estate Tax Valuations
Effective wealth transfer planning depends on accurate valuations that support estate and gift tax reporting. As wealth grows, so does the importance of having a clear plan for how assets will be passed on—whether through inheritance or gifting. Each transfer may trigger federal gift or estate taxes, making credible estate planning valuation analysis essential to minimize exposure and ensure compliance.
At Peak Business Valuation, we provide independent, defensible gift and estate tax valuations prepared in accordance with recognized professional standards. Our team collaborates closely with attorneys, accountants, and financial planners to determine fair market value, analyze discounts for lack of control and marketability, and align valuation conclusions with each client’s estate planning objectives. A well-supported gift & estate tax valuation not only satisfies IRS requirements but also helps preserve the value of a business and its legacy for future generations.
Gift & Estate Tax Valuation Services
Our gift and estate tax valuation services encompass a full range of analyses required for effective estate planning and IRS compliance. We perform valuations for Form 709 (Gift Tax) and Form 706 (Estate Tax) filings, including closely held business interests, family limited partnerships (FLPs), and LLCs. Our team provides detailed Discount for Lack of Control (DLOC) and Discount for Lack of Marketability (DLOM) analyses, supported by empirical data and valuation theory, to substantiate fair market value conclusions. In addition, we offer machinery and equipment appraisals, minority interest valuations, and expert witness support when valuation conclusions are subject to examination. Each engagement is aligned with both the legal and tax objectives of the estate plan.
We Provide
- Discount Studies: We perform discount studies (lack of marketability and/or lack of control) for family limited partnerships (FLPs) and limited liability companies (LLCs). Applying these discounts can reduce the taxes owed.
- Specialized Appraisal for Entities: FLPs and LLCs require a trained eye to assess overall value, especially when investments involve land, bonds, or businesses (private or public). Taxes also play a role in these appraisals, particularly for LLCs with pass-through tax amendments.
- Equity Interest Valuations: We also value equity interests in privately held operating companies. This requires a holistic review of liabilities and moving capital.
- Closely-Held Businesses: These business valuations apply to privately owned businesses that lack public market data. Our analysis considers earnings, assets, and risk to determine fair market value for tax and transfer purposes.
The Importance of Asset Valuations
Since estate and gift taxes are based on the fair market value of assets, asset valuation plays a key role in estate and gift planning. It helps establish the fair market value of your property, investments, and businesses. Accurate appraisals ensure assets are reported correctly for tax purposes.
When a closely held business is part of an estate, a business valuation is especially important. Getting these appraisals done right is essential because they are subject to scrutiny by many federal agencies, including the Internal Revenue Service (IRS). If these institutions deem that the assets in question have been under- or over-valued, or that there are clerical errors in the reporting, they could levy severe penalties.
Additionally, we often help firms navigate Discounts for Lack of Control (DLOC) and Discounts for Lack of Marketability (DLOM)—two factors that can make a major difference in the value reported to the IRS.
Because tax laws and valuation standards are subject to frequent changes, mistakes can occur. A professional gift and estate tax valuation reduces these risks and gives you confidence in your planning. Hiring an accredited appraisal firm will do much to mitigate these issues.
How Gift & Estate Tax Valuations Work?
Gift and estate tax valuations require careful analysis, even for experienced professionals. At Peak Business Valuation, we review financial statements, tax returns, and ownership structures in detail to ensure accurate, defensible valuations. This thorough approach helps minimize the risk of costly mistakes and can reduce potential tax liabilities.
When transfers involve closely held businesses, family limited partnerships (FLPs) or LLCs are often used to structure ownership and manage tax exposure. Without these entities, transfers of assets can trigger additional taxes. Even as a general partner in an FLP or LLC, having a professional valuation is critical. The IRS closely monitors estate tax filings, and a well-supported gift & estate tax valuation can help mitigate challenges, avoid penalties, and provide peace of mind for your clients.
When Do You Need a Gift & Estate Tax Valuation?
There are many instances when a gift and estate tax valuation may be necessary. It is often needed when transferring ownership to family or heirs. The valuation helps meet IRS requirements and avoid disputes. It also ensures taxes are calculated on an accurate value. Below are common situations when a gift and estate tax valuation is required:
- Gifting business shares to a family member
- Passing a business to heirs after death
- Transferring assets into a trust
- Dividing ownership among beneficiaries
Having a clear gift and estate tax valuation keeps the process equitable. It also provides a record to be referenced if questions arise later.
Why Professional Valuation Expertise Matters
Accurately valuing closely held businesses—such as family-owned or small enterprises—requires deep experience and objectivity. At Peak Business Valuation, we apply multiple recognized valuation approaches, allowing us to select the methodology that best reflects the unique characteristics of each business and supports a defensible fair market value determination.
Our team also brings extensive experience in analyzing and applying Discounts for Lack of Control (DLOC) and Discounts for Lack of Marketability (DLOM)—critical factors that can significantly impact value in gift and estate tax contexts. With the proper credentials and professional designations, our valuations carry credibility in the eyes of the IRS, reducing the likelihood of challenge and ensuring we are fully prepared to defend our conclusions if necessary.
Full Measured Compliance
Our gift and estate valuations use commonly accepted methodologies that adhere to the valuation guidelines established under Revenue Ruling 59-60. We then provide the findings in a gift & estate tax valuation report that satisfies the IRS’s “Qualified Appraisal” requirements.
Frequently Asked Questions
What is a gift and estate tax valuation?
A gift and estate tax valuation is an independent business valuation that determines the fair market value of a business or ownership interest for federal gift tax and estate tax purposes. A qualified business appraisal helps support IRS reporting, ownership transfers, estate planning, and gift and estate tax filings.
When do I need a gift tax valuation or estate tax valuation?
A gift tax valuation is commonly needed when transferring business interests to family members, trusts, or other individuals during your lifetime. An estate tax valuation is typically required after the owner’s death to determine the business’s fair market value for federal estate tax reporting. Valuations are also commonly used for succession and estate planning.
Why is a qualified business appraisal important for IRS gift and estate tax filings?
A qualified business appraisal provides an independent estimate of fair market value using recognized valuation methodologies. A well-supported valuation helps substantiate the reported value, support IRS compliance, and provide documentation if the IRS reviews the valuation.
How is fair market value determined for a gift or estate tax valuation?
Business valuation professionals generally consider the Market, Income, and Asset Approaches when estimating fair market value. The appropriate approach—or combination of approaches—depends on the company’s financial performance, assets, industry, and the facts and circumstances of the engagement.
Can valuation discounts apply to a gift tax or estate tax valuation?
Yes. Depending on the ownership interest being transferred, discounts for lack of control (DLOC) and lack of marketability (DLOM) may apply. These discounts can reduce the reported fair market value, but they must be supported by accepted valuation theory and the specific facts of the engagement.
What information is needed for a gift and estate tax valuation?
Most gift and estate tax valuation engagements require several years of financial statements and tax returns, along with information about the company’s ownership structure, operations, assets, and any shareholder or operating agreements. Additional information may be requested depending on the complexity of the business and the purpose of the valuation.
How long does a gift and estate tax valuation take?
Peak Business Valuation typically completes most gift and estate tax valuation engagements within 5–20 business days after receiving the necessary financial information. More complex businesses or ownership structures may require additional time.
Can Peak Business Valuation work with my CPA or estate planning attorney?
Peak regularly works with CPAs, estate planning attorneys, financial advisors, and trustees to provide independent gift tax valuations and estate tax valuations. We collaborate throughout the engagement to support estate planning, ownership transfers, and IRS reporting. We also provide litigation support and expert witness services when needed.
What is the difference between a gift tax valuation and an estate tax valuation?
The valuation methodologies are generally similar, but the purpose and valuation date differ. A gift tax valuation determines the fair market value of a business interest transferred during the owner’s lifetime, while an estate tax valuation determines the fair market value as of the owner’s date of death or another applicable valuation date.
Why choose Peak Business Valuation for a gift and estate tax valuation?
Peak Business Valuation provides independent, well-supported qualified business appraisals for gift tax valuations, estate tax valuations, and other tax-related valuation needs for privately held businesses nationwide. Our credentialed valuation professionals deliver credible reports, responsive communication, and timely turnaround while working closely with business owners, CPAs, attorneys, and financial advisors.
Let Peak Business Valuation Help
Industries for Gift & Estate Tax Valuation
With respect to gift and estate tax valuations, Peak Business Valuations has worked with the business owners in the following industries:
- Automotive
- Beverage, Brewing, and Bottling
- Consumer Products
- Construction, Design, and Engineering
- Data, Data Storage, and Cybersecurity
- Distribution Services
- Financial Technology and Payments
- Financial Sponsors and Asset Management (Private Equity, Hedge Funds, Venture Capital, Business Development Companies)
- Food Processing, Restaurants, and Hospitality
- Franchises and Other Multi-Location Properties
- Health & Beauty
- Healthcare, Life Sciences, Medical Products & Devices, and Pharmaceuticals
- Industrial Products and Manufacturing
- Media Communications, Entertainment, and Printing & Publishing
- Medical and Dental Practices
- Pet and Animal Care Industry
- Software as a Service (SaaS)
- Sports, Fitness, and Recreation
- Technology and Telecommunications
- Textiles
- Transportation, Supply Chain
- Waste Management
- Wholesale Distribution
- Automotive
- Beverage, Brewing, and Bottling
- Consumer Products
- Construction, Design, and Engineering
- Data, Data Storage, and Cybersecurity
- Distribution Services
- Financial Technology and Payments
- Financial Sponsors and Asset Management (Private Equity, Hedge Funds, Venture Capital, Business Development Companies)
- Food Processing, Restaurants, and Hospitality
- Franchises and Other Multi-Location Properties
- Health & Beauty
- Healthcare, Life Sciences, Medical Products & Devices, and Pharmaceuticals
- Industrial Products and Manufacturing
- Media Communications, Entertainment, and Printing & Publishing
- Medical and Dental Practices
- Pet and Animal Care Industry
- Software as a Service (SaaS)
- Sports, Fitness, and Recreation
- Technology and Telecommunications
- Textiles
- Transportation, Supply Chain
- Waste Management
- Wholesale Distribution
Get Started Today
With over a decade of valuation experience, Peak Business Valuation has extensive expertise in gift and estate tax valuations. Our team brings both passion and depth of knowledge across a wide range of industries and markets.
We take pride in delivering estate planning valuations that are not only accurate and credible but also thoughtfully tailored to each client’s unique situation. We often help individuals and firms navigate Discounts for Lack of Control (DLOC) and Discounts for Lack of Marketability (DLOM)—two factors that can make a major difference in the value reported to the IRS. We are happy to connect and talk through strategies for presenting these discounts effectively and structuring gifts most advantageously. Whether you’re planning for the future or preparing to transfer ownership, we’re here to help value a business for estate planning.
Contact us today to discuss your gift and estate planning valuation needs or schedule a consultation with our team.
