We have a Real Estate family partnership. For giving gifts to our children for Estate planning,what discount% we can use ?

Asked over 1 year ago - Pittsford, NY

We have established,through a Professional appraisal,our equity. We have two classes of shares ,Voting(25%) & Non voting (75%). My wife & I have the voting . What discount can be applied for : Minority Interest; Lack of Marketability Discount(LOMD) & Non Voting discount.
We are thinking,based on all the cases & other guidelines, a combined discount of 50%.
What is your advice?

Attorney answers (2)

  1. James P. Frederick

    Contributor Level 20

    5

    Lawyers agree

    1

    Answered . There is an expression in legal fields that "pigs get fat and hogs get slaughtered." I, too, have heard of people taking 50% valuation discounts. I think that is an aggressive posture and you might be asking for an audit. You have a fairly complex arrangement, here, and it does not make sense to do this without consulting a tax attorney to make sure that you handle everything correctly.

    James Frederick

    ***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ******... more
  2. Amanda Marie Cook

    Contributor Level 15

    5

    Lawyers agree

    Answered . You should have an appraisal done for both the value and the discounting. I often recommend having the appraisal done every other December so that you can use it December and January.

    THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can... more

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