Bill Introduced Will Have Significant Impact on Valuation of Assets for Estate & Gift Planning
June 24, 2009

H.R. 436 has been introduced by Rep. Earl Pomeroy (D-N.D.) and will have a significant impact on the valuation of assets for estate and gift planning. Historically, assets, whether gifted or bequeathed, are valued at fair market value. Fair market value is defined as the value that a willing buyer and willing seller, both having knowledge of the relevant details, would exchange property. H.R. 436 targets the valuation of property being exchanged between related parties. Effectively, where there is family control, the Bill would disallow minority (lack of control) discounts on the non-business assets, (stocks, bonds, excess cash, non-working capital and land). There is an exception if there is material participation in a business which holds these assets. For small business owners this bill could be devastating. As we all know, higher values mean higher taxes.

If you have questions, please contact:
Charles B. Jones, Esquire

CJones@TandLLaw.com
(410) 752-2468