IRC 409A Common Stock Valuation
This free, guided checker walks your team through the key decision points for IRC 409A Common Stock Valuation. Answer a few questions to see the likely approach and the evidence to document.
Open the free tool
For owners, CFOs, and deal and reporting teams
Estate and Gift Tax Valuation
This free, guided checker walks your team through the key decision points for Estate and Gift Tax Valuation. Answer a few questions to see the likely approach and the evidence to document.
8 guided steps
Private in your browser
Official guidance links
Start the free checker
Your free guided checker
Answer a few quick questions below. It is private - nothing is submitted or stored - and takes about a minute.
This tool is a high-level valuation screening aid for general information only and is not a valuation, appraisal, accounting, tax or legal opinion. A defensible conclusion of value requires a qualified valuation specialist applying professional standards to entity-specific evidence.
The questions this tool walks you through
Here is what the checker asks and why each step matters. Prefer to talk it through? Contact us and we will help directly.
Which transfer is being valued for federal transfer tax?
The transfer type fixes the valuation date and the governing authority: estate tax values property at death under IRC Section 2031, gift tax values it at the date of the gift under IRC Section 2512, and a bona fide full-consideration sale is outside the transfer-tax base entirely. Identify the transfer before selecting any method, because the willing-buyer, willing-seller standard applies to a specific moment in time.
Value the property at fair market value on the date of death under IRC Section 2031. Value the gift at fair market value on the date of the gift under IRC Section 2512. Treat the excess of fair market value over consideration as a gift under IRC Section 2512(b). Confirm the consideration was genuinely equal to value in an arm's-length transaction; no gratuitous-transfer valuation arises.
Official guidance: IRS estate and gift tax valuation
Might any estate property change substantially in value within six months after death, so the alternate valuation date should be evaluated?
The alternate valuation date under IRC Section 2032 is an all-or-nothing election that revalues the entire gross estate six months after death, with any property sold or distributed in that window valued at its disposition date. It is available only when it lowers both the gross estate and the estate tax, so it matters chiefly when values have fallen. Note the election but still develop date-of-death value as the default.
Evaluate the alternate valuation date under IRC Section 2032 alongside date-of-death value. Use date-of-death fair market value under IRC Section 2031.
Official guidance: IRS estate and gift tax valuation
Will the gift be reported on Form 709 with disclosure that meets the adequate-disclosure regulation?
Adequate disclosure under Treas. Reg. Section 301.6501(c)-1(f) requires a description of the transferred property and any consideration, the identity and relationship of the parties, and either an appraisal or a detailed statement of the valuation method and the financial data used. Meeting it starts the three-year statute of limitations; falling short leaves the gift open to IRS revaluation without time limit, so the appraisal and its support are as important as the value itself.
Assemble the description, method, and financial data required to start the limitations period under Treas. Reg. Section 301.6501(c)-1(f). Correct the disclosure before filing; without it the gift stays open to revaluation indefinitely.
Official guidance: IRS estate and gift tax valuation
What is the nature of the transferred property?
The nature of the property fixes the mechanics of value: quoted securities use the mean-price rule of Treas. Reg. Section 25.2512-2, real property and tangible personal property require specialist appraisals under USPAP, and a closely held interest requires a full appraisal under Rev. Rul. 59-60. Route each asset class to the method the regulations prescribe rather than applying a single approach to all.
Value at the mean of the high and low quoted selling prices on the valuation date under Treas. Reg. Section 25.2512-2. Obtain a qualified appraisal under USPAP - Standard 1 for real property and Standards 7 and 8 for personal property. Develop a fair market value appraisal under the eight factors of Rev. Rul. 59-60.
Official guidance: IRS estate and gift tax valuation
Does the entity derive its value primarily from active business operations and earnings rather than from holding investment assets?
Rev. Rul. 59-60 directs different weightings for operating and holding companies: earnings drive the value of a business that sells products or services, while net asset value drives the value of an entity that mainly holds real estate, securities, or other investments. Classify the entity first, because it decides which approach governs and whether a built-in gains adjustment is in scope.
Weight earning capacity and apply the income and market approaches for an operating company. Weight net asset value for an investment or holding entity under Rev. Rul. 59-60, Section 5.
Official guidance: IRS estate and gift tax valuation
Does the operating business have a sufficient earnings history and comparable-company or transaction data to apply the income and market approaches?
The income and market approaches depend on reliable inputs: a stable earnings history, defensible forecasts, and genuinely comparable public companies or transactions. A pre-revenue, erratic, or distressed business often cannot support them, and the adjusted net asset method then provides a floor. Test the quality of the data before concluding on an earnings-based value, because Rev. Rul. 59-60 warns against capitalizing unrepresentative earnings.
Develop the income and market approaches, then reconcile to the correct level of value. Fall back to the adjusted net asset method as a floor where earnings and comparables are unreliable.
Official guidance: IRS estate and gift tax valuation
Does the entity hold appreciated assets subject to an embedded entity-level capital gains tax?
When value rests on the fair value of underlying assets, a corporate-level built-in gains tax reduces what a hypothetical buyer would pay, because the buyer inherits the deferred tax on the appreciation. The adjustment applies to assets held in a C corporation or a recently converted S corporation still within its recognition period; a pure pass-through generally carries no entity-level tax. Quantify the embedded gain and the applicable rate, and document whether the reduction is dollar-for-dollar or present-valued.
Reduce net asset value for the embedded capital gains tax, then address control and marketability discounts. Conclude on net asset value without a built-in gains adjustment, then address control and marketability discounts.
Official guidance: IRS estate and gift tax valuation
Is the transferred interest a non-controlling (minority) interest that lacks a ready market?
The base indication from the income and market approaches must be reconciled to the level of value of the actual interest transferred. A minority interest in a private company generally carries a discount for lack of control and a discount for lack of marketability; intrafamily transfers of minority interests are still valued with those discounts under Rev. Rul. 93-12, with no family attribution. Confirm the size and rights of the interest before quantifying any discount.
Apply discounts for lack of control and lack of marketability to reconcile to the minority, non-marketable level of value. Conclude at the control level before a lack-of-control discount, addressing any control-level marketability adjustment.
Official guidance: IRS estate and gift tax valuation
Want a professional to confirm your answer?
Send us your situation and one of our senior CPAs will review it with you - fixed fee, no surprises.
Contact Us