Valuation needed to take advantage of $5 million gift exemption opportunity

If you own a business, chances are this asset is your most valuable but least liquid asset that you own. The advantages of getting a valuation of your business are described in the following article:

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The tax bill enacted at the end of 2010 provides a two year opportunity to use a $5 million exemption from federal gift tax for aggregate lifetime gifts ($10 million for a married couple). This exemption applies for 2011 and 2012 and is in addition to the $13,000 annual exclusion gifts that may be made free of federal gift tax ever year.

After 2012, the exemption falls back to the prior amounts of $1 million for aggregate lifetime gifts ($2 million for a married couple). The transfer tax exemptions and highest rates for the years 2009 to 2013 are displayed in this chart.

If you have a closely held business or a family partnership, then this might be an ideal time for you to pass the ownership along to family members. Combined with the slowdown in economic conditions, there may not be a better time for you to take advantage of this two year window and save estate taxes and gift or transfer your interests at low values.

If you would like more information on this opportunity and how it could affect your specific estate tax situation, then please call your tax shareholder  or a member of our valuation team, such as Mark Schaaf. We would be glad to set up a meeting to discuss those issues with you in context with your entire estate plan.