Estate and Gift Tax Valuations

An estate value is determined by analyzing the assets included in the estate as of the applicable valuation date. For a closely held business interest, the analysis may consider company financial information, the nature of the ownership interest, market and transaction evidence, and relevant valuation considerations. A formal appraisal documents the reasoning and supports the value reported for estate planning or tax purposes.

Valuation methods are commonly organized around income, market, and asset-based approaches, with specific methods selected based on the business and assignment. Examples include capitalization of earnings, discounted cash flow, guideline public company, guideline transaction, and adjusted net asset methods. The appropriate method or combination depends on the company’s financial profile, available evidence, ownership interest, and purpose of the valuation.

A business valuation may be needed when an estate includes shares, LLC units, or another interest in a closely held company. Executors, trustees, attorneys, and CPAs may use the appraisal to support estate administration, estate tax reporting, or related planning. The engagement should identify the valuation purpose, ownership interest, and applicable valuation date so the analysis addresses the reporting need.

A valuation may be needed when an owner transfers a private company interest to a family member, heir, or trust and must support the reported gift value. The appraisal analyzes the business and the specific interest transferred, then presents the basis for the conclusion. Peridot Valuation provides support for Form 709 matters involving closely held business interests.

The information typically includes financial statements, tax returns, company records, ownership documents, and details about the transaction or estate. Additional information may be relevant depending on the business, ownership interest, valuation date, and assignment purpose. Providing complete and consistent records helps the valuator understand operations, risks, value drivers, and the circumstances surrounding the transfer or estate.

Yes. Jack Schroeder has experience valuing both controlling and minority interests. A minority interest may have different rights, limitations, and economic characteristics from a controlling interest, so the analysis focuses on the specific ownership position being transferred or reported. The valuation considers the company, governing documents, ownership rights, and purpose of the assignment.

Peridot Valuation offers Form 706 valuation and Form 709 valuation services. Form 706 engagements generally address business interests included in an estate, while Form 709 engagements generally address transferred interests for gift tax reporting. The appraisal is prepared around the assignment purpose, valuation date, ownership interest, and information available for the closely held company.

Common clients include CPAs and tax firms, estate and trust attorneys, executors, trustees, heirs, and owners transferring interests in family businesses. These professionals may need an independent appraisal for an estate, trust, gift, tax return, or related planning matter. Peridot Valuation also works with clients addressing closely held business interests connected to broader transaction or succession needs.