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Estate Planning for Business Owners: The Importance of Knowing Your Company’s Value

ARTICLE | September 03, 2024

Authored by Vasquez + Company


With the federal gift and estate tax exemption set to decrease in 2026, now is a crucial time for business owners to reassess their estate plans. This article emphasizes the importance of knowing the current value of your business as you plan for transferring ownership and wealth. It explains how valuation factors—such as fair market value, business history, and industry outlook—affect the gifting process. By transferring shares sooner, business owners can take advantage of the current tax exemption before it reverts to a lower amount.

Key Points:

  • Federal Exemption Deadline: The lifetime exemption, now at $13.61 million, is set to revert to around $7 million in 2026.
  • Business Valuation: Knowing your business’s fair market value is critical for tax planning and wealth transfer.
  • Proactive Gifting: Transferring shares now while the exemption is higher can shield more wealth from estate taxes.

For more information, read the full article here.

 


Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.


 

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​Vasquez + Company LLP has over 50 years of experience in performing audit, tax, accounting, and consulting services for all types of nonprofit organizations, governmental entities, and private companies. We are the largest minority-controlled accounting firm in the United States and the only one to have global operations and certified as MBE with the Supplier Clearinghouse for the Utility Supplier Diversity Program of the California Public Utilities Commission.

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