ESTATE TAX
Business Valuation for Estate Tax
Business valuation services for estate tax covering date-of-death fair market value, IRS Form 706 estate tax returns, and valuation discounts for closely held interests. Equity Business Valuation Services prepares USPAP-compliant appraisals of C-corporation shares, S-corporation stock, LLC membership interests, and closely held partnership interests nationwide.
Federal Estate Tax Filings Require a Fair Market Value of the Decedent's Business Interest
When a decedent's estate includes an interest in a closely held business, the executor must report its fair market value on IRS Form 706, the United States Estate (and Generation-Skipping Transfer) Tax Return. Shares in a C corporation, S-corporation stock, LLC membership interests, and limited partnership interests each require a supportable valuation, and a well-documented appraisal is what allows the reported value to withstand later examination.
Our appraisers determine fair market value as of the date of death, or the alternate valuation date when the estate elects it, applying the fair market value standard set out in IRS Revenue Ruling 59-60. We weigh the income, market, and asset approaches, then document any 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
Equity Business Valuation Services Appraises All Types of Closely Held Interests for Estate Tax
We prepare estate tax valuations of privately held operating companies, holding entities, and fractional ownership positions reported on Form 706.
C-Corporation Stock
Fair market value of shares in privately held C corporations, with control and marketability discounts applied where the facts support them.
S-Corporation Shares
Date-of-death valuations of S-corporation stock, reflecting the tax attributes and distribution rights that affect value.
LLC & Partnership Interests
Fair market value of LLC membership interests and limited partnership interests, based on the governing documents and market evidence.
Family Limited Partnerships
Valuations of FLP and family holding-entity interests, documenting supportable discounts for lack of control and lack of marketability.
Minority & Non-Controlling Interests
Analysis of non-controlling positions, including discounts for lack of control and lack of marketability where the evidence supports them.
Whole & Fractional Ownership
Fair market value of full or fractional interests in closely held operating companies and holding companies included in the estate.
HOW IT WORKS
How We Prepare Your Estate Tax Business Valuation
- 01
Share the Estate's Details
Tell us the business interest held by the estate, the decedent's date of death, and whether the alternate valuation date may be elected 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 and determine supportable fair market value and any applicable discounts.
- 04
USPAP-Compliant Report
We deliver a signed report documenting the fair market value as of the valuation date, ready for the executor to file with Form 706.
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
Estate Tax Business Valuation Questions
Do I need a business valuation to file an estate tax return?
Yes. When an estate that must file Form 706 includes an interest in a closely held business, the executor is required to report the fair market value of that interest. A supportable appraisal documents how the value was determined and gives the reported figure the evidence it needs if the return is examined.
What date is used to value a business for estate tax?
The default valuation date is the decedent's date of death. An estate may instead elect the alternate valuation date under Internal Revenue Code Section 2032, which values the property six months after death, when doing so reduces the value of the gross estate and the estate tax due. We set the effective date of value to match the estate's election.
What standard of value applies to an estate tax valuation?
Estate tax valuations use fair market value, the price at which the interest would change hands between a willing buyer and a willing seller, neither under compulsion and both reasonably informed. IRS Revenue Ruling 59-60 sets out the factors we weigh in reaching that value for a closely held business interest.
How do valuation discounts apply to an estate's business interest?
When the estate holds 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.
Who orders the appraisal, and who receives the report?
The executor or personal representative of the estate typically engages us, often alongside the estate's attorney or CPA. We deliver a signed, USPAP-compliant report addressed to the engaging party so it can be attached to Form 706 and shared with the estate's advisors.
Support Your Estate Tax Filing with a USPAP-Compliant Valuation
Request a business valuation prepared to meet IRS Form 706 estate tax reporting requirements.