Minority Discounts For Estate Valuation

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Valuation Discounts for Estate and Gift Taxes

(2 days ago) For assets traded on an established market or that have a readily ascertainable value, the value for gift and estate tax purposes is their fair market value on the date of the transfer or death. For other assets, valuation must be established by an educated estimate. ... (DLOC—also referred to as a minority discount) is usually quantified by ...

https://www.journalofaccountancy.com/issues/2009/jul/20091463.html

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Valuation Discounts | QuickRead | News for the Financial ...

(5 days ago) Applying Minority Discounts for Partial Interests. The starting point for valuation is the entity’s net asset value (NAV). NAV is defined as the market value of the real estate plus any other assets, less liabilities. The use of the asset approach in determining the value of an entity usually results in a value that reflects a controlling ...

http://quickreadbuzz.com/2019/07/31/business-valuation-angela-sadang-valuation-discounts/

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Tax Court Blesses 35% Valuation Discount On Investment ...

(1 days ago) “Pierson’s expert valuer applies some discounts to lack of control and lack of marketability, but IRS’ expert says those only applies if the willing buyer doesn’t also buy out the minority ...

https://www.forbes.com/sites/peterjreilly/2020/03/22/tax-court-blesses-35-valuation-discount-on-investment-family-limited-partnership/

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Dealing With Real Estate Minority Interest Discounts in ...

(1 days ago) The husband’s appraiser applied a 60% discount to the valuation of the parties’ minority shares of both parcels, reasoning that the values should be decreased due to the restrictions on logging imposed by partnership agreements. He used both minority and marketability discounts. The wife’s appraiser applied neither.

https://www.divorcemag.com/articles/dealing-with-real-estate-minority-interest-discounts-in-divorce-cases

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Valuation Discounts | QuickRead | News for the Financial ...

(2 days ago) After discussing the application of a minority discount or discount for lack of control (DLOC) in the last issue of Real Estate Perspectives, I will now turn to discussing the next incremental adjustment in the valuation of partial, non-controlling interests in entities holding real estate as their primary and most valuable asset. In this article, we will address the use of the discount for ...

http://quickreadbuzz.com/2019/08/28/business-valuation-angela-sadang-valuation-discounts-2/

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Valuation Discounts Applicable to Real Estate Holding ...

(5 days ago) Valuation Discounts Applicable to Real Estate Holding Companies By Angela Sadang | May 29, 2019 In this two-part series, I will discuss real estate holding companies and describe the use of minority discounts (also known as the discount for lack of control, or DLOC) in the valuation of partial, non-controlling interests in entities holding real estate as their primary and most valuable asset.

https://www.markspaneth.com/insights/industry/real-estate/valuation-discounts-applicable-to-real-estate-holding-companies

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Valuation Discounts Applicable to Real Estate Holding ...

(4 days ago) Valuation Discounts Applicable to Real Estate Holding Companies (PART 2) By Angela Sadang | August 19, 2019 After discussing the application of a minority discount or discount for lack of control (DLOC) in the last issue of Real Estate Perspectives, I will now turn to discussing the next incremental adjustment in the valuation of partial, non-controlling interests in entities holding real ...

https://www.markspaneth.com/insights/industry/service/valuation-discounts-applicable-to-real-estate-holding-companies-part-2

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Business valuation advice: 8 factors quantifying minority ...

(1 days ago) If a shareholder is selling a minority share (meaning a less-than-controlling interest) in a privately-held business, a minority discount may be applied to the pro-rata share value. There are a number of factors that are considered by business valuators to determine this discount. In this post, we look at 8 factors quantifying minority discounts.

https://fullerllp.com/blog/business-valuation-advice-8-factors-quantifying-minority-discounts/

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Valuation of family-owned entities for estate and gift tax ...

(3 days ago) Such entities are especially attractive because of the ability to employ discounts for lack of marketability or control in valuing the transfer for gift, estate, or generation-skipping transfer tax purposes. 1 However, with the recent release of proposed regulations under Sec. 2704, the IRS is substantially curtailing the use of such valuation ...

https://www.thetaxadviser.com/issues/2017/may/valuation-family-owned-entities-estate-gift-tax.html

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How to value fractional interests in real estate - MBAF ...

(2 days ago) Marketability discounts reflect a minority owner’s limited ability to convert his or her investment into cash. Business valuator required. Reported valuation discounts for undivided fractional interests in real estate vary dramatically from case to case. Real estate appraisers typically lack experience with fractional interests.

https://mbafcpa.com/advisories/value-fractional-interests-real-estate/

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What is a Minority Discount? - MNP LLP

(1 days ago) However, while the fair market value of Maggie's shares are equal to their pro-rata value, the fair market value of Leslie shares are often worth something less then $400,000. The difference between the pro-rata value of Leslie's shares, and their fair market value, is the minority discount.

https://www.mnp.ca/en/posts/what-is-a-minority-discount

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Valuation Discounts | Trust Lawyer

(4 days ago) Now you see it. Now you don’t.Valuation Discounts in Plain English Quick Quiz: Q. How much is half of $1 Million A. $500,000B. $400,000C. $300,000 or lessD. All of the answers are correct. One half of $1Million can be worth anywhere from less than $300,000 to $500,000. Answer D is correct. Let’s see why, for estate and gift tax purposes, assets may be worth less than what you might think.

http://trustlawyer.com/services/estate-tax-planning/valuation-discounts

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Valuation of Assets | Internal Revenue Service

(4 days ago) Discount for Lack of Marketability - Job Aid for IRS Valuation Professionals PDF - (pdf 389KB) Reasonable Compensation - Job Aid for IRS Valuation Professionals PDF - (pdf 222KB) - This guides IRS professionals on how the Federal courts treat this issue and how the IRS determines reasonable compensation.

https://www.irs.gov/businesses/valuation-of-assets

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Shareholder buyout? Court Rejects Minority Discount in ...

(2 days ago) In determining the value of Doss’s ownership in the company in 2003, the trial court concluded that it was appropriate to apply a minority discount. A minority discount is an economic concept reflecting the notion that a partial ownership interest may be worth less than its proportional share of the total business.

https://www.bfvlaw.com/for-what-its-worth-court-rejects-minority-discount-in-valuing-stock/

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Rules for Minority Discount in Business Valuations · Excel ...

(1 days ago) Rules for Minority Discount in Business Valuations. Minority Interest Discount – The concept of minority interest deals with the relationship between the interest being valued and the total enterprise, based on the factors discussed.” “The primary factor on the value of the minority interest in relationship of the minority shareholder interest to the total shareholder interest and how ...

https://successbiznow.com/rules-for-minority-discount-in-business-valuations/

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Valuing Closely Held Businesses: What You Need to Know ...

(3 days ago) The total of these discounts can reduce the pro-rata value of a minority interest by up to 50 percent in some instances. Thus, the transfer of assets from an estate can occur more rapidly since the application of discounts is an appropriate consideration in arriving at fair market value.

https://www.ksmcpa.com/blog/valuing-closely-held-businesses-what-you-need-to-know

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Marketability Discounts, Fair Value and the Forgotten ...

(1 days ago) Minority investors usually just passively share value with the controlling investor. Therefore, the fair value of the minority interest proportionately follows that of the controlling investors, and it would be suboptimal for an independent, willing, able, and knowledgeable seller to accept a discount to this value in an orderly transaction.

https://www.cpajournal.com/2018/02/28/marketability-discounts-fair-value-forgotten-market-participant/

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Minority Interest Discounts in Family Controlled Entities ...

(1 days ago) The fair market value of a property for transfer tax purposes is the hypothetical price on which the property would change hands between a willing buyer and a willing seller. Minority discounts exist to reflect the reality that a minority interest lacks control over the entity.

https://www.wadeash.com/firm/blog/minority-interest-discounts-in-family-controlled-entities.html

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Fair Market Value of Minority Interest in Real Estate ...

(1 days ago) Ownership of a minority interest in private real estate is very common. Structures include real estate funds, partnerships, real estate limited partnerships, joint-ventures and corporations. The fair market value of the minority interest is rarely worth its pro-rata share of en bloc 100% value, regardless of the structure.

https://cbvinstitute.com/events/fair-market-value-of-minority-interest-in-real-estate/

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Discounts For Lack Of Marketability (DLOM)

(2 days ago) Discounts For Lack Of Marketability Challenges . Noncontrolling, nonmarketable ownership interests in closely held companies pose some unique challenges for valuation analysts.

https://www.investopedia.com/terms/d/dlom.asp

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The IRS Takes The Offensive On Valuation Discounts: Part ...

(2 days ago) Taxpayers then claim large discounts on the valuation of these gifts. This disappearing value is illusory because family members are not minority interest holders in any meaningful sense. The Clinton administration’s proposal sought to eliminate valuation discounts except as they applied to active businesses. The Green Books: 2010 through 2013

https://www.taxlawforchb.com/2016/09/the-irs-takes-the-offensive-on-valuation-discounts-part-two/

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Estate Planning for Real Estate Using Valuation Discounts

(7 days ago) Estate Planning for Real Estate Using Valuation Discounts Presented by Catherine B. Eberl, Esq. Hodgson Russ LLP 716-848-1237 [email protected] New York State Bar Association Trusts and Estates Law Section 2015 Fall Meeting October 30, 2015 I. Date of Valuation a) For lifetime transfers, the gift is valued as of the date of the gift. IRC ...

https://www.nysba.org/WorkArea/DownloadAsset.aspx?id=58668

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Valuation Discounts in Modern Estate Planning | Downey ...

(3 days ago) These valuation discounts have been quite popular in estate planning during recent decades. Discounts have allowed business interests to pass by gift or through estates at lower values.

https://www.jdsupra.com/legalnews/valuation-discounts-in-modern-estate-93951/

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The Case for the Disappearing Minority Interest Discount ...

(1 days ago) When I was a young business appraiser, or well, when I was a new but not so young business appraiser, the valuation of illiquid minority interests involved developing a base value for a business and then applying two big discounts, a minority interest discount (MID), and then, a marketability discount, aka DLOM. This post is about the first, now disappearing, minority interest discount.

https://chrismercer.net/the-case-for-the-disappearing-minority-interest-discount/

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Minority Discounts For Estate Valuation - Find Coupon Codes

(1 months ago) Estate Discount For Minority Interest - get-coupon-codes.info. CODES (1 months ago) Valuation Discounts for Estate and Gift Taxes. CODES (4 days ago) Following the methodology suggested by the IRS’ experts and leaving the specialized funds out of the sample, the Tax Court calculated minority interest discounts of 11.32%, 14.34% and 4.63% of the respective gifts made in 1999, 2000 and 2001 ...

https://www.find-coupon-codes.com/minority-discounts-for-estate-valuation/

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Top Sites Have Minority Discounts For Estate Valuation ...

(1 months ago) Top Sites Have minority discounts for estate valuation ... COUPON (1 months ago) Valuation Discounts for Estate and Gift Taxes. COUPON (3 days ago) For assets traded on an established market or that have a readily ascertainable value, the value for gift and estate tax purposes is their fair market value on the date of the transfer or death.

https://walmartcouponscodes.com/minority-discounts-for-estate-valuation

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Valuing Minority Interests - Lotus Amity

(5 days ago) The Discount for Lack of Marketability exists to value a minority holding in a private company compared to what that interest would worth if the company was listed. “The Discount for Lack of Marketability (DLOM) is an amount or percentage deducted from the value of an ownership interest to reflect the relative absence of marketability”, AICPA

https://lotusamity.com/valuations/valuing-minority-interests/

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The Valuation of FLPs

(2 days ago) (No discount for lack of control is necessary because cashflow capitalized or discounted is the amount available to the minority owner; therefore, the result is a minority value.) Market approach: Determine valuation multiples by looking for comparable publicly traded interests.

https://www.thetaxadviser.com/issues/2010/jan/thevaluationofflps.html

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Minority interest discounts: a quantitative approach for ...

(25 days ago) 9. Martin M. Shenkman and Cal R. Feingold, "Minority, Marketability Discounts Affect Valuation of Partnership Interest," The Real Estate Finance Journal (Summer 1993): 18-25. 10. Some practitioners advocate using real estate investment trusts (REITs) as a database for partnership valuation, but this author does not, for a variety of reasons.

https://www.thefreelibrary.com/Minority+interest+discounts%3a+a+quantitative+approach+for+real+estate...-a054636290

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Partial interest valuation of real estate - A case study ...

(2 days ago) Partial interest valuation is a technique used by appraisers and other valuation professionals to estimate the value of a fractional interest in real estate. Fractional interests in real estate result from the owner's ownership of less than 100% of a given property. ... However, the court did allow a 30% discount for a minority interest and a ...

https://nerej.com/partial-interest-valuation-of-real-estate-a-case-study

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Valuing Real Estate Fractional Ownership Interests

(1 days ago) Intangible Asset Valuation Insights . Intangible asset valuation analysts are often called on to perform fair market value . valuations of real estate undivided ownership interests (also called fractional ownership interests). Many of these real estate undivided interests are owned by holding companies or by high net worth individuals.

http://www.willamette.com/insights_journal/10/summer_2010_12.pdf

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The Application of Valuation Discounts by By Sharon F ...

(6 days ago) This reduction was 40 percent of the pro-rata value. By reducing the pro-rata value of the minority interest using the discounts, the taxable amount is lower and may generate tax savings for gift and estate tax purposes, just by considering the inherent characteristics of a minority ownership interest.

https://www.bpbcpa.com/application-valuation-discounts-sharon-f-foote-asa-cfe/

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Valuation of minority discounts in closely-held companies ...

(11 days ago) The result is that the donor's estate ends up with only a minority interest entitled to a minority interest discount, thereby reducing estate taxes from both intervivos gifts and the minority interest discount. In estate planning, a transfer to the spouse at a discounted value could have significant effect on the amount of property passing by a ...

https://www.thefreelibrary.com/Valuation+of+minority+discounts+in+closely-held+companies.-a014605316

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Oh No! Valuation Discounts Under Siege? | Tax Law for the ...

(5 days ago) Many years ago, certain provisions were enacted into law to prevent the reduction of taxes through the use of “estate freezes” and other techniques designed to reduce the value of the transferor’s taxable estate and to discount the value of the taxable transfer to the beneficiaries of the transferor without reducing the economic benefit ...

https://www.taxlawforchb.com/2015/07/oh-no-valuation-discounts-under-siege/

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Family Limited Partnerships - A Valuation Overview ...

(6 days ago) This structure also provides estate and gift tax advantages versus the direct transfer of individual assets, and the gifted limited partnership interests may be subject to appropriate valuation discounts, such as a minority interest discount or a marketability discount for minority interest and lack of marketability.

https://mercercapital.com/article/family-limited-partnerships-a-valuation-overview/

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A Closer Look The IRS Takes Aim at Valuation Discounts ...

(3 days ago) the ability to use two common valuation discounts. More specifically, the proposed regulations could reduce or potentially eliminate the use of minority-interest and marketability discounts for interests in family-controlled entities being transferred among family members. These new rules would apply whether the entity owns an

https://www.bessemertrust.com/sites/default/files/2018-06/BessemerTrust_A_Closer_Look_IRS_Takes_Aim.pdf

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Changes to Valuation Discounts for Family Businesses - HORAN

(8 days ago) The IRS has included valuation discounts on their list of priorities for over a decade. The proposed changes will affect those who were counting on valuation discounts as part of their estate planning and, if the proposed regulations are enacted, will increase the transfer taxes on the planned gift or bequest of a family owned business.

https://www.horanassoc.com/blog/2016/08/30/changes-to-valuation-discounts-for-family-businesses

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Valuation Discount Limit for Estate and Gift Tax

(4 days ago) IRS Proposes Regulations to Limit Valuation Discounts for Estate and Gift Tax Purposes August 26, 2016 On August 2, 2016, the IRS released proposed regulations that would significantly strengthen its goal of reducing valuation discounts for transfers of minority interests among family members in closely held businesses.

https://www.mossadams.com/articles/2016/august/irs-proposes-limiting-valuation-discounts

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Minority Owner Buyouts & Minority Owner Discounts

(4 days ago) The conflict over fair value stems from two opposing views: those for minority owner discounts and those against them. Those who agree with minority owner discounts, which can reduce the purchase price of minority-owned shares by up to 50 percent, argue that lack of both voting power and marketability should factor into the cost of a buyout.

https://www.links-financial.com/the-ins-outs-of-minority-ownership-buyouts/

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Valuation Discounts for Family Limited Partnerships and ...

(2 days ago) Valuation analysts are often engaged to estimate the value of interests in family limited partnerships (“FLPs”) and family limited liability companies (“FLLCs”) for estate and gift tax reporting and/ or planning purposes. Such entities are typically closely held and the level of value sought in these

http://willamette.com/insights_journal/19/summer_2019_6.pdf

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Determining the Fair Value of Minority Ownership Interests ...

(2 days ago) If the value of the minority owner’s interest is determined as the value of a proportionate interest in the corporation, the minority owner would receive $980,000. However, if a discount for lack of control were factored in, the value of the minority owner’s shares could conceivably be reduced by 33 percent, to $653,333.

https://www.floridabar.org/the-florida-bar-journal/determining-the-fair-value-of-minority-ownership-interests-in-closely-held-corporations-are-discounts-for-lack-of-control-and-lack-of-marketability-applicable/

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Considerations for Using Buy-Sell Agreements - The CPA Journal

(2 days ago) To a business appraiser, fair market value may imply that certain valuation discounts should be applied to the value of a noncontrolling, or “minority,” interest. These discounts will reflect the noncontrolling character of the interest and may also reflect the lack of marketability of an interest for a privately held business.

https://www.cpajournal.com/2018/10/03/considerations-for-using-buy-sell-agreements/

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Discount for Lack of Marketability

(2 days ago) Discount for Lack of Marketability Job Aid for IRS Valuation Professionals September 25, 2009 Developed by Engineering/Valuation Program DLOM Team This Job Aid is current as of the original date of issuance only. The IRS may update this Job Aid in the future to take account of developments after the date of issuance.

https://www.irs.gov/pub/irs-utl/dlom.pdf

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Value of a 1 Percent Minority Interest in Real Estate LLC

(4 days ago) Value of a 1 Percent Minority Interest in Real Estate LLC Source/Formula As of 12/31/2012 1) Net Asset Value of Real Estate LLC Table 2-3 Net Asset Value $ 4,553,969 2) Value of a 1% Minority Interest Before Discounts Row 1 * 1% $ 45,540 3) Calculation of Discount Due to Lack of Control Table 4-5 Price to NAV Discount 31.69% 4) Reduction in ...

https://www.rosscompanycpa.com/files/Sample%20Real%20Estate%20LLC%20Valuation%20Report.pdf

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Rules for Minority Discount in Business Valuations ...

(4 days ago) Minority Interest Discount – The concept of minority interest deals with the relationship between the interest being valued and the total enterprise, based on the factors discussed.” “The primary factor on the value of the minority interest in relationship of the minority shareholder interest to the total shareholder interest and how much control the minority interest does have over the ...

https://www.vistage.com/research-center/business-financials/rules-for-minority-discount-in-business-valuations/

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New Treasury Regulations Target Valuation Discounts ...

(1 months ago) One of the main targets of the new regulations is the perceived abuse of manufacturing valuation discounts with deathbed transfers. Currently, it is possible for a parent with a controlling interest in a business entity to gift a small portion of such interest to a child (at a discount) to leave the parent with a minority interest in his or her ...

https://www.hinklaw.com/blog/alerts/new-treasury-regulations-target-valuation-discounts/

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Minority Discounts - Eric Reenstierna Associates

(2 months ago) The 10% interest is a minority, and its value is a discount from the face value of 10%. A sizable industry has grown up to apply discounts in the valuation of minority interests. In the valuation of the assets of an estate, for instance, it is important that a taxpayer’s heirs not be forced to pay taxes on more than what the estate is really ...

http://erassoc.com/a-minoritydiscounts.html

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Analyzing Business Appraisal Discounts - Gettry Marcus

(2 days ago) For example, such a non-controlling interest may trade for 80 percent of the company’s net asset value. 7 By definition, the real estate appraiser has valued the interest at 100 percent of net asset value. In this example, the discount for lack of control is 20 percent. 8. Discount for Lack of Marketability (DLOM). Real estate appraisers ...

https://www.gettrymarcus.com/analyzing-business-appraisal-discounts-applied-to-a-real-estate-entity/

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5.4.3 - Minority discounts

(2 days ago) Minority discounts are an important element in estate planning, where taxpayers desire to pass low-valued property to family members and avoid gift and estate taxes. Revenue Ruling 93-12. IRS "swing block" position.

https://users.wfu.edu/~palmitar/Law&Valuation/chapter%205/5-4-3.htm

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