The federal estate and gift tax code is complex and difficult to navigate. Many of its provisions, if not understood, can impose heavy tax burdens upon decedents and their families. Proper tax planning by making use of current tax code provisions is essential to managing a taxpayer’s estate during his life, and ultimately, these taxes. Legacy Valuation Services provides valuations of businesses, business interests and intangible assets for estate tax compliance and gifting purposes, working closely with clients and their chosen professionals.

Since the mid-90s the Tax Court has taken a stricter view of the appraisal profession and raised its expectations. In prior times, the Tax Court would often split the difference between opposing opinions of experts retained by the IRS and taxpayers regarding the value of a business interest. However, the Court is now more likely to select an appraiser’s opinion in total or perform its own valuation. It demands far more detailed research from appraisers to substantiate their opinions, especially regarding highly controversial areas such as valuation discounts.

Valuation discounts may be used to address several situations– such as discounting for the lack of marketability. In determining this discount, some appraisers may perform “benchmark” comparisons by citing several old restricted stock and/or pre-IPO stock studies, and applying an average discount derived from them in their analysis. Now, however, the Tax Court wants to see a more sophisticated empirical guideline analysis of specific stocks versus the interest being valued. When a report doesn’t reach this standard, the taxpayer runs the serious risk of having the valuation thrown out of court.

LVS estate and gift tax valuations employ current valuation theory, data and rigorous analysis to meet the expectations of both the IRS and the Tax Court. Our detailed valuation reports are designed to document every facet of the assignment, leading the IRS and Court to conclude the analysis is sound. This is why every estate and gift tax valuation report comes with our Audit Guarantee, which makes LVS the provider of choice for estate and gift tax valuations.

If you’d like to discuss your own estate’s needs, give us a call or submit an inquiry in the contact section of our website.

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