"VALUATION TECHNIQUES AND STRATEGIES TO MINIMIZE TAXES ON FAMILY BUSINESSES" [2019] ELECD 1431; in Zwick, A. Gary; Jurinski, J. James (eds), "Tax and Financial Planning for the Closely Held Family Business" (Edward Elgar Publishing, 2019) 331

Book Title: Tax and Financial Planning for the Closely Held Family Business

Editor(s): Zwick, A. Gary; Jurinski, J. James

Publisher: Edward Elgar Publishing

Section: Chapter 11

Section Title: VALUATION TECHNIQUES AND STRATEGIES TO MINIMIZE TAXES ON FAMILY BUSINESSES

Number of pages: 29

Abstract/Description:

Valuation issues arise in a number of planning contexts in a family business. This chapter explores both the basic purposes for valuation and specific techniques used in valuing interests in family businesses. Although “valuation” is normally associated with estate and gift tax issues, valuation issues also arise in income tax planning and in a number of planning contexts in a family business such as buy-sell agreements, stock redemptions, and divorce. The chapter provides a detailed review of the IRS’s basic valuation approach set out in Revenue Ruling 59-60, and also explores valuation discounts and the IRS’s current position on discounts. The chapter details the Tax Code’s “Chapter 14” rules that apply to the valuation of family business buy/sell agreements. The chapter also includes a detailed discussion of Family Limited Partnership (FLP) valuation cases. Finally, the chapter explores a number of creative planning opportunities in the valuation area that can benefit family business clients.