Critical Deadline for Gift Tax Exemptions
At midnight December 31, 2025, the federal lifetime gift tax exemption will plummet from over $13 million to over $7 million dollars for 2026.
If you haven’t taken advantage of the current opportunity to gift interests in your business, real estate, private equity, BDC or other funds, why are you waiting? Valuations are lower in 2023 and 2024 due to multiple market forces.
Low values provide an opportunity to gift a higher percentage of one’s investments tax free, but that opportunity is lost when valuations are higher and the gift tax threshold is lower.
Click here to read our exclusive article The Gift Tax Cliff is on the Horizon to learn more about valuation and gifting of equity and debt interests in businesses, real estate, and funds, include carried interests.
Estate and Gift Tax Reporting
The IRS expects Estate and Gift Tax valuations to be performed by professionals experienced in valuing similar enterprises and assets and that each analysis comply with IRC 59-60, including consideration of all three generally accepted approaches to value, as they may apply: Income Approach, Market Approach and Cost Approach. Our staff meet the IRS standards of a “Qualified Appraiser.”
For fractional interest studies (aka “Discount Studies”), our analyses consider multiple valuation methods to determine the difference in value between a control and a minority interest, as well discounts for lack of marketability, if appropriate. Such methods include, as applicable:
- Benchmarking (i.e. Mandelbaum analysis)
- Option-pricing models (i.e. Finnerty, Chaffe, and Black-Scholes)
- Restricted stock analyses
We assist equity holders with the valuation of domestic and international investments, including:
- Interests in closely-held businesses and in thinly-traded public companies.
- Equity and debt instruments in simple and complex capital structures.
- Carried interests and investments in business development companies (“BDC”), private equity funds, hedge funds, and real estate funds.
- Interests in trusts, LLCs, LP’s, FLPs, S-corps, etc.
- Marketable securities.
- Real estate, intellectual property, and equipment.
- Interests in real estate holding companies, combining the skills of our real estate appraisers and financial valuation analysts.
Dispute and Litigation
Unfortunately, there are occasions when parties disagree over the management, ownership, valuation, and gifting of assets, equity, etc. We assist with these matters as well, including:
- Investigative accounting
- Asset tracing, and asset listing
- Damages calculations
- Valuations
- Expert witness reports, consulting, and testimony
How Marshall & Stevens can help with Estate and Gift Tax
Our Transaction Opinion team collaborates with our internal multi-disciplinary professionals to provide the value analyses and fresh independent opinions to fiduciaries, financing sources and investors for public and private company transactions.
Business Valuation
Whether for purchase, sale, investment, gifting, recapitalization, or equity/option grants, establishing an understanding of value is crucial for decision makers.
Healthcare Valuation
Our specialists provide valuations of medical practices and facilities, contractual agreements, equity interests, real estate, and equipment.
Real Estate Valuation
Attorneys, accountants, wealth managers and financing sources refer their clients to Marshall & Stevens because we deliver high-quality work through an insightful, service-oriented approach.
Frequently Asked Questions
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Marshall & Stevens has a team of specialist that assist business owners with understanding the current value of their business, how to increase value, and to provide exit strategies.
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These assets may be held outside the business and leased back to the business, and/or to other businesses, in order for you and your family to maintain control of the asset into perpetuity.
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We work with our clients and their financial institutions, investors, insurance companies, and other trusted advisors to provide the independent value opinions they require.
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The accelerated depreciation benefits (tax savings) from a cost segregation analysis on acquired real estate (or just improvements to a leased space) can typically pay for a material percentage of the transaction costs and/or multiple financing payments.
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Real estate should be looked at strategically for potential beneficial tax reporting, financial reporting, depreciation including cost segregation and bonus depreciation, financing including sale leaseback, etc.
The fair market value of acquired real estate is often much higher than the seller’s capitalized basis and the allocation between land (not depreciable) and improvements (depreciable) is often different than what the assessor has determined.
For financial reporting, the value of acquired real estate needs to be allocated to land, building and improvements, and intangible assets.
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The accelerated depreciation benefits (tax savings) from a cost segregation analysis on acquired real estate (sometimes just tenant improvements) can typically pay for a material percentage of the transaction costs and/or multiple financing payments.
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Financial reporting compliance requires a determination of fair lease rate.
A large percentage of transactions include lease agreements that are not at current fair market value. This is more often the case when the owner of the business is also the owner of the real estate.
In the acquisition of a medical practice, for instance, the acquiror must not pay a higher than market rate to acquire or lease the property from the seller.
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We review financial projections against past performance, comparable company performance, and industry forecasts. We ask for support from our clients, as necessary, to make us comfortable with their projections and to provide an explanation in our valuation report.
The Marshall & Stevens Difference
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.
Client Highlights
Here are a few client success stories from
Estate and Gift Tax Contacts at Marshall & Stevens
Background
Darleen Armour is a Managing Director for the Financial Valuation and Consulting practice with Marshall & Stevens. She is responsible for all financial valuation assignments in the West Region. Ms. Armour leads the Technical Standards Committee for the national Financial Valuation & Consulting practice.
Ms. Armour has been in the valuation business since 1987. Her experience includes Fairness Opinions, Solvency Opinions and the valuation of businesses, intangible assets, and securities for financial reporting purposes (purchase price allocation and impairment), estate and gift tax reporting, equity compensation/stock options (IRC 409A), ESOPs, and litigation support.
Ms. Armour works with public and private companies in a wide range of industries. She has a great amount of experience in the valuation of entertainment and media companies and their intangible assets including film libraries and music catalogs.
Prior to joining Marshall & Stevens, Ms. Armour has served as Director of BDO’s Valuation and Business Analytics practice, Senior Vice President at FMV Opinions, Inc., and Senior Vice President at Houlihan Lokey Howard & Zukin, Inc.
Ms. Armour served as an Adjunct Professor at California State University, Fullerton teaching a Graduate Level Business Valuation/Mergers & Acquisition Course from 2010 to 2018.
Ms. Armour has been qualified as an expert witness, has provided testimony, and been a neutral third appraiser in arbitration and legal proceedings.
She is an active member of the Association for Corporate Growth having served on the Orange County Board of Directors from 2001 – 2020 and is a member of the Membership Committee for the Los Angeles Chapter of the Association for Corporate Growth.
Professional Highlights
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- Membership Committee, Los Angeles Chapter
- Orange County Board of Directors, 2001-2020
- Marshall & Stevens, Inc.
October 2015-present
‣ Managing Director, Financial Valuation & Consulting, 2019-present
‣ Director, Financial Valuation & Consulting, 2015-2019 - BDO
Director, Valuation & Business Analytics, 2014-2015 - FMV Opinions
Senior Vice President, 2012-2014 - Cronkite & Kissell
Principal, 2001-2012 - Houlihan Lokey
Senior Vice President, 1987-2001
- California State University, Fullerton
Adjunct Professor, 2010-2018
‣ Business Valuation/Mergers & Acquisitions (graduate level)
Background
Michael Conroy is a Director with ValueScope, a Marshall & Stevens company. He works primarily in financial valuation and estate & gift tax services.
Mr. Conroy has over 17 years of consulting and valuation experience, concentrating on complex fair market value analyses. He provides valuation and financial consulting services to companies in a broad range of industries.
Working with domestic and international clients, Mr. Conroy has performed thousands of business valuations involving gift and estate tax, financial reporting, mergers and acquisitions (valuations for buyers/sellers, fairness and solvency opinions), litigation support, and other company requirements (including stock options and ESOPs).
Mr. Conroy has completed several international transfer pricing engagements, has dealt with State tax apportionment issues, and arm’s length transfer pricing issues between related not-for profit corporations.
Mr. Conroy previously worked with the national valuation firm CBIZ Valuation Group, LLC where he performed business appraisals as a senior manager. Prior to that, he taught chemistry and physics to high school and college students at Xavier College in Ba, Fiji, for two years as a U.S. Peace Corps volunteer.
Professional Highlights
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- Member, CFA Society of Dallas/Fort Worth
- Candidate Member, American Society of Appraisers
- ValueScope, Inc.
Director, 2010-present - CBIZ Valuation Group, LLC
Senior Manager, 1998-2009 - Valley View State Bank
Vault Teller, 1996 - U.S. Peace Corps
Secondary Education Volunteer, 1993-1995
- Xavier College (Ba, Fiji)
U.S. Peace Corps volunteer, 1993-1995
‣ Chemistry and Physics (high school and college level)
Background
David A. Gaynor, ASA, is a National Practice Leader for our Financial Valuation Practice and Managing Director of our Healthcare Valuation Practice. Mr. Gaynor’s responsibilities include overseeing the delivery of valuation services to the Firm’s financial valuation clients.
Mr. Gaynor has more than 22 years of consulting experience, specializing in the valuation of businesses and business interests, intangible assets, liabilities, and complex securities in connection with mergers and acquisitions, financing, estate and gift tax planning, charitable contributions, litigation support services, strategic planning, fairness opinions, Employee Stock Ownership Plans (ESOPs), accounting matters, and recapitalizations. Mr. Gaynor has served clients in a wide variety of industries, including the healthcare, food & beverage, restaurant, consumer products, telecommunication and manufacturing industries.
Prior to joining Marshall & Stevens, Mr. Gaynor led the Healthcare Valuation Group at Crowe, LLP. He has also been employed at CohnReznick, LLP and EisnerAmper, as well as Management Planning Inc. and Pluris Valuation Advisors, LLC.
Mr. Gaynor earned a Bachelor of Science in Finance from The College of New Jersey in Ewing, NJ.
Mr. Gaynor is an Accredited Senior Appraiser (ASA) in business valuation with the American Society of Appraisers. In addition, Mr. Gaynor is a Member of the Appraisal Issues Task Force (AITF), a Board Member of the Towson University Family Network, and a Member of the Montgomery Township, NJ Budget and Finance Committee. Mr. Gaynor is a frequent writer and speaker on valuation topics.
Professional Highlights
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- Board Member, Towson University Family Network
- Member, Montgomery Township, NJ Budget and Finance Committee
- Marshall & Stevens, Inc.
December 2019-present
‣ Managing Director, Northeast Financial Valuation Practice Leader, 2023-present
‣ Managing Director, 2019-2023 - Crowe
February 2014-November 2019
‣ Managing Director, Healthcare Valuation Services Leader, 2019
‣ Senior Manager, 2014-2019 - CohnReznick LLP
Senior Manager, 2012-2014 - Pluris Valuation Advisors LLC
Vice President, 2010-2012 - Management Planning, Inc.
Vice President, 2008-2010 - Valuation Research Corporation
Vice President, 2007-2008 - Crowe Horwath LLP
Manager, 2004-2007 - EisnerAmper
Supervisor, 2002-2003
Background
Patrick Schmidt is a Managing Director with Value Consulting Group, a Marshall & Stevens company. He works primarily in ESOP and business valuation.
Mr. Schmidt has been providing business valuation and litigation support services on a full-time basis since 1991, and he has completed more than 5,000 business valuation projects. He is a frequent speaker on valuation topics and has written several articles as well.
Mr. Schmidt assists clients in business valuation and litigation support issues, including mergers and acquisitions, marital dissolutions, estate planning, damage and lost profit calculations, intangible asset valuation and management planning.
Professional Highlights
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- Former President, American Society of Appraisers, Twin Cities Chapter
- Former President, American Society of Appraisers, Twin Cities Chapter
- ExxonMobil, Global Training Educational Services
Finance Instructor, 2012-2019 - University of St. Thomas, MBA Program
Adjunct Instructor of Finance, 2002-2009 - Thomson Corporation, Management Development Program
Associate Instructor, 2005-2009
- Value Consulting Group
Managing Director, 2003-present - Virchow Krause Valuation, LLC
Partner, 1999-2003 - Schmidt Financial, Inc.
Principal, 1998-1999 - LAWCO Financial, LLC
Manager, 1996-1998 - McGladrey & Pullen, LLP
Senior Consultant, 1993-1995 - Shenehon Company
Staff Appraiser, 1991-1993
Background
Roger Smith is a Managing Director with Lone Peak Valuation Group, a Marshall & Stevens company. He works primarily in business and intellectual property valuation and commercial litigation support.
Mr. Smith has over twenty five years of experience providing consulting and business valuation services to clients involved in a very wide range of industries. He has been primarily involved with valuing businesses, intellectual property and ownership interests for transactions, buy/sells, disputes and financial reporting purposes.
Mr. Smith is a Certified Public Accountant, Accredited in Business Valuation and Certified in Financial Forensics by the American Institute of Certified Public Accountants. Mr. Smith has hundreds of hours of additional training in the areas of valuation, litigation, and lost profit calculations. He has testified in Federal Court, State Court, Arbitrations, and acted as a court appointed expert and special litigation committee member.
Professional Highlights
.collapsible { background-color: #d9eafc; color: black; cursor: pointer; padding: 10px; width: 100%; border: none; text-align: left; outline: none; font-size: 16px; font-weight: bold; } .active, .collapsible:hover { background-color: #d9eafc; } .content1 { padding: 0 18px; display: visible; overflow: hidden; background-color: #fff; } var coll = document.getElementsByClassName("collapsible"); var i; for (i = 0; i < coll.length; i++) { coll[i].addEventListener("click", function() { this.classList.toggle("active"); var content = this.nextElementSibling; if (content.style.display === "block") { content.style.display = "none"; } else { content.style.display = "block"; } }); }- Member, American Institute of Certified Public Accountants
- Member, Utah Association of Certified Public Accountants
- Chairman of the Business Valuation Committee (2001-2002, 2002-2003)
- Member, National Association of Certified Valuators and Analysts
- Co-Instructor NACVA-Valuing Intellectual Property
- Instructor NACVA-Valuing Intellectual Property for Financial Reporting Purposes
- Member, Supreme Court’s Oversight Committee for the Office of Professional Conduct (2019-present)
- Board Member, School of Accounting Advisory Board, University of Utah (2019-present)
- Lone Peak Valuation Group
Managing Director, 2008-present - LECG, LLC
Director, 2001-2008 - PricewaterhouseCoopers, LLP
Manager, 1995-2001
Background
Matthew R. West, is a Principal and Executive Managing Director with Marshall & Stevens Incorporated. He serves as National Practice Leader for the Healthcare Practice and the Energy & Infrastructure Practice. He is also active in the Financial Valuation & Consulting Practice.
Mr. West specializes in the valuation of healthcare systems, physician practices, business enterprises, debt and equity instruments, and intangible assets. Analyses performed are used for compliance and consulting purposes including buy/sell consideration, purchase price allocation (FASB ASC 805), capital stock/stock option valuations (IRC 409A, FASB ASC 718), impairment (FASB ASC 350), estate and gift tax reporting, ESOP formation and reporting, and financial reporting of complex financial instruments including auction-rate securities (FASB ASC 820). He also leads Fairness Opinion engagements.
Mr. West has a specialty in the valuation of dialysis centers and practices.
Mr. West has provided expert witness testimony in valuation and economic damage assessments on separate occasions in the states of Colorado and Oklahoma.
Mr. West earned a Master's in Business Administration with an emphasis in Accounting and Taxation from St. Louis University and a Bachelor of Science in Business Administration and Finance from the University of Kansas.
Mr. West is an Accredited Senior Appraiser (“ASA”) of the American Society of Appraisers, in the Business Valuation discipline and in Intangible Asset Valuation. He has also received a Certification of Completion, American Society of Appraisers— Advanced Multidisciplinary Healthcare Valuation Education Program.
Professional Highlights
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Executive Managing Director, 2002-present
Our Latest Thinking about Estate and Gift Tax
The Gift Tax Cliff is on the Horizon
Cost Segregation and Estate Tax Reporting - Tax Reduction for Heirs!
