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Estate and Gift Tax

Appraisals of businesses or other property may be needed for estate planning purposes, such as in determining the probable amount of estate or gift taxes as an aid in planning prior to the death of a business owner. In the case of the estate of a deceased person, a valuation of a business, business interest, or other property owned by the estate is frequently necessary in connection with the preparation and filing of an estate tax return.

In 2013, the American Taxpayer Relief Act of 2012 was enacted, providing for a federal exemption of $5,000,000. Adjusted for inflation, the exemption is $5,430,000 in 2015. Adequate disclosure rules require that a gift be reported and meet certain requirements in order to start the statute of limitations of three years, otherwise the IRS may revalue the gift at any time in the future. The submission of an appraisal will meet the adequate disclosure requirements with respect to the valuation of any gift transfer if the appraisal meets the requirements of Internal Revenue Code Section 301.6501(c)-1(f)(3).

Delphi has extensive experience assisting business owners, families, estate planning attorneys, and wealth managers plan and document the transition of ownership in privately held companies and partnerships. We closely follow IRS challenges in Tax Court and routinely present to attorneys and business owners on developments and implications of Tax Court decisions. We are well-versed in discounts for lack of control, lack of marketability and built in gains and regularly discuss and advise on the implications for discounts in Family Limited Partnership and Limited Liability Company agreements.

Our capabilities include valuations for purposes of:

  • Gift tax compliance (IRS Form 709)
  • Estate tax compliance (IRS Form 706)
  • State estate tax compliance (e.g., Form M-706 in Massachusetts, Form ET-706 in New York, From RI-100A in Rhode Island, and Form 706ME in Maine)
  • Non-cash charitable contributions
  • Estate planning

We perform valuations of:

  • Common stock, preferred stock and debt
  • Derivatives including stock options and warrants
  • Intangible assets, including patents, trademarks, software, copyrights
  • Family limited partnership (FLP) interests
  • Limited liability companies (LLC) interests