Estate and gift tax valuations are required when ownership of assets is transferred and the value of those assets must be reported for tax purposes.
These situations most commonly arise in:
For federal tax reporting, the IRS requires that transferred assets be reported at fair market value as of a specific valuation date. This includes filings such as Form 706 (estate tax) and Form 709 (gift tax).
Because these filings can be reviewed or challenged, the valuation must be supportable, well-documented, and consistent with IRS guidance and accepted valuation practices.
We support estate planning, gifting strategies, and reporting requirements across a range of asset types and ownership structures.
These engagements often involve evaluating how control, marketability, and the specific rights and restrictions of an ownership interest affect value in the following situations:
This breadth matters because estate and gift tax reporting often involves multiple asset classes that must be analyzed consistently and supported within a single defensible framework.
An estate or gift tax valuation determines the fair market value of transferred assets for tax reporting purposes.
Fair market value is defined as the price at which property would change hands between a hypothetical willing buyer and willing seller, both having reasonable knowledge of the relevant facts and neither being under compulsion to act.
This standard requires more than estimating what an owner believes an asset is worth. This requires an objective analysis of:
The valuation must reflect conditions as of the valuation date, which is fixed by the timing of the transfer or death, and cannot incorporate hindsight. These principles form the basis for analyses that must meet IRS standards and withstand review.
Estate and gift tax valuations are subject to IRS standards, including the framework outlined in Revenue Ruling 59-60. Analyses must be performed by professionals with experience in valuing similar assets.
Valuations consider the three recognized approaches, as applicable:
Estate and gift tax valuations are performed in accordance with Revenue Ruling 59-60 and the Fair Market Value standard of value. Our staff meets the IRS standard of a “Qualified Appraiser,” and our reports are prepared as “Qualified Appraisals” that satisfy IRS requirements for adequate disclosure. All analyses are prepared in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP).
Our analyses are prepared to withstand review by the IRS, auditors, and courts.
Estate and gift tax valuations may be subject to IRS review or become part of a dispute between taxpayers, beneficiaries, or other parties. These situations often arise when valuation conclusions are challenged or when complex ownership structures and transfers are subject to scrutiny.
We provide support in these situations, including:
Our analyses are structured to be clear, well-documented, and defensible in environments where valuation conclusions are closely scrutinized.
For estate planners, the most dangerous risk isn’t necessarily an immediate audit—it is the unlimited statute of limitations.
Estate and gift tax valuations require analysis of the specific characteristics of the ownership interest being transferred, as well as the context in which the transfer occurs. These factors directly influence how value is determined and how it may be evaluated by the IRS.
The level of control associated with an ownership interest affects its value. Controlling interests typically have the ability to direct operations, influence distributions, and make strategic decisions, while non-controlling interests may be subject to limitations that affect their economic benefit.
The ability to convert an ownership interest into cash, and the time required to do so, can significantly affect value. Interests in privately held entities or structured ownership arrangements may not have an established market, requiring analysis of liquidity and transferability.
Operating agreements, partnership agreements, shareholder agreements, and other governing documents often impose restrictions on transfer, ownership rights, or distributions. These provisions can materially affect the value of an interest and must be evaluated in the context of the specific structure.
The characteristics of the underlying asset or entity also influence value. Operating businesses, investment holding entities, and real estate structures may present different risk profiles, cash flow characteristics, and market considerations.
Estate and gift tax valuations must reflect conditions as of the valuation date, which is determined by the timing of the transfer or death. Economic conditions, market data, and company-specific information are evaluated as of that date and cannot incorporate subsequent events.
Valuations prepared for estate and gift tax purposes are subject to IRS review. As a result, analyses must be well-documented, consistent with accepted valuation practices, and supported by appropriate methodologies and assumptions.
Certain estate and gift tax valuations involve ownership interests where control, liquidity, and transfer restrictions directly affect value.
For minority interests in family limited partnerships (FLPs) and LLCs, our analyses consider the appropriate valuation methods to determine the difference in value between a control and a minority interest, including the application of discounts for lack of control and lack of marketability, where appropriate.
For privately held entities, we employ lack of marketability methods such as:
These methods are applied based on the specific facts and circumstances of the interest being valued and are not used as standardized or formulaic adjustments.
If you are planning a transfer, preparing an estate filing, or need support for a reported value, a well-supported valuation is critical.
Marshall & Stevens provides independent estate and gift tax valuations that are grounded in accepted methodologies and designed to withstand IRS scrutiny.
Contact our team to discuss your situation, timing requirements, and the specific assets involved.
Our professionals collaborate across valuation, tax, financial reporting, and dispute disciplines to deliver independent analyses that support fiduciary decision-making, tax reporting, transactions, and regulatory scrutiny.
Current estate and gift tax exemption levels have created planning opportunities for individuals and families considering wealth transfer strategies. Changes to federal exemption thresholds may affect the amount of wealth that can be transferred without additional tax exposure, making early planning and accurate valuation an important part of the decision-making process.
For 2026, the federal lifetime gift and estate tax exemption is $15,000,000 per individual. The annual gift tax exclusion is $19,000 per recipient. Gifts above the annual exclusion may require a gift tax return and may reduce the donor’s remaining lifetime exemption. Because exemption amounts and tax rules may change, individuals should review current IRS guidance and consult with their tax and legal advisors when evaluating gifting strategies.
A defensible estate or gift tax valuation is supported by appropriate methodologies, relevant market data, and clear documentation consistent with IRS standards and accepted valuation practices. Analyses should address the specific characteristics of the ownership interest being valued, including control, marketability, transfer restrictions, and the conditions that existed as of the valuation date.
Estate and gift tax filings require assets to be reported at fair market value as of a specific valuation date. Inaccurate or unsupported valuations can create challenges during IRS review, disputes among beneficiaries, or future reporting issues. A well-supported valuation helps establish a clear and defensible basis for tax reporting and planning decisions.
A Qualified Appraisal is a valuation report prepared in accordance with IRS requirements for tax reporting purposes. These analyses must satisfy standards related to methodology, documentation, and adequate disclosure and are often subject to IRS review. Qualified Appraisals are typically prepared by professionals who meet the IRS definition of a Qualified Appraiser.
The IRS may review estate and gift tax valuations to evaluate the methodologies, assumptions, supporting documentation, and conclusions used in the analysis. Valuations prepared for tax reporting purposes should be well-documented, consistent with accepted valuation practices, and supported by defensible assumptions based on the facts and circumstances of the interest being valued.
Succession planning often involves the transfer of ownership interests between generations, business partners, trusts, or other entities. Valuation analyses help establish fair market value for these transfers and provide a framework for planning decisions related to ownership structure, gifting strategies, buy-sell arrangements, and long-term continuity.
Separating real estate or intellectual property from an operating business may provide greater flexibility for tax planning, liability management, succession planning, or ownership transitions. These structures often require separate valuation analyses because the assets may have different risk characteristics, cash flow profiles, and ownership considerations than the operating entity itself.
Gifts that exceed the annual exclusion amount may require the filing of a gift tax return and generally reduce the donor’s remaining lifetime gift and estate tax exemption. Once available exemption amounts are exhausted, additional taxable gifts may be subject to federal gift tax at rates that can reach 40%, depending on the amount transferred and the taxpayer’s circumstances. Because exemption amounts and tax rules may change, individuals should review current IRS guidance and consult with their tax and legal advisors when evaluating gifting strategies.
Marshall & Stevens provides Fairness and Solvency Opinions, valuation analyses, investigative accounting, and expert witness services to assist public and private clients with their important transactions and litigation matters.
Here are a few client success stories from
