Business Valuations for Gifting

The Internal Revenue Code allows an individual making a gift (referred to as a donor) to utilize a lifetime gift tax exclusion. Owners of businesses often wish to pass assets via gifting to children and grandchildren. This is partially or totally accomplished by the use of an individual's lifetime allowable gift exemption, currently set at $5.25 million (indexed for inflation annually). For indirect or direct skips to grandchildren, a donor also may want to allocate the current available lifetime exemption for generation-skipping tax, also currently $5.25 million (indexed for inflation). For a more detailed description of gift taxation, consult your tax adviser.