Current economic realities combined with the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act are creating unique opportunities for estate planning in 2011 and 2012.
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the Act) significantly impacts estate and gift planning. The Act increased the estate and gift tax exemption amounts to $5 million in combination with a 35% maximum estate and gift tax rate, reunifying the gift tax and the estate tax for the first time since the enactment of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001.
The increased exemption provides an unprecedented opportunity to review and explore options for the transition of family wealth and, in conjunction with lower asset values and interest rates, move substantial amounts of wealth out of taxable estates over the next two years. Future changes in estate tax reform are currently unknown, as the Act is a temporary fix and creates short-lived rules that will sunset on December 31, 2012. If Congress fails to act before that time, the 2013 estate, gift and generation-skipping transfer tax rules will revert to the law in effect prior to EGTRRA ($1 million estate and gift tax exemption and 55% maximum estate and gift tax rate).
Keep in mind that the IRS will be watching closely. The 2006 addition of §170 (f) (11)(E) to the Tax Code pertaining to Qualified Appraisals/Appraisers imposes standards on opinions of value. Noncompliance could result in time-consuming IRS challenges and costly penalties. In addition, failure to comply with the adequate disclosure regulations published in 1999 may result in an audit window that never closes. Now, more than ever, it is imperative for families and their tax advisors to engage qualified, trustworthy valuation professionals.
The full continuum of services
American Appraisal is a leading valuation and related services firm providing expertise in all business interests, tangible assets and intangibles. We offer the full continuum of valuation services to those planning for the transition of family wealth, including:
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Valuation of closely held stock, including common, preferred and convertible-preferred
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Discount studies for business interests, including, but not limited to, those for lack of control, lack of marketability and built-in capital gains
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Premium studies for control
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Valuation of intellectual property such as trademarks, copyrights, patents, contracts, technology, etc.
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Valuation of real and personal property
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Testing asset transfers to assess the reasonability that the transferor has received fair and adequate consideration in exchange for the property rights given up
We possess decades of experience.
American Appraisal has provided hundreds of valuations for estate and gift tax purposes for over 50 years. Our deliverables are thoroughly supported and have withstood scrutiny of the IRS and judicial authorities.
We are independent.
American Appraisal focuses exclusively on valuation and related services. That independence guarantees our greater objectivity.
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This is our only business.
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We are independent of audit or other attest services, rating agency, investment banking or other conflicts.
We are qualified experts.
Breadth and depth of expertise eliminates the need to rely on subcontractors. Our Consultants, who have been with us an average of more than 10 years, have the experience necessary to value all types of company stock, tangible assets, and intangible property that may be transferred to a trust/Family Limited Partnership (FLP) or other forms of business entity.
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Focused on and committed to valuation since 1896
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American Appraisal is a “Qualified Appraiser” as defined by USPAP and the IRS
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Our Consultants hold credentials from all recognized valuation standard-setting agencies, including the American Society of Appraisers (ASA), The Appraisal Institute (MAI), the American Institute of Certified Public Accountants (CPA) and the Institute for Professionals in Taxation (CMI). Other credentials include ABV, P.E. and CFA.
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Unrivaled interaction with the Appraisal Foundation, including past chairmanship and current board trusteeship with the International Valuation Standards Council (IVSC).
We are focused on Client needs.
American Appraisal is employee owned. We aren’t merely involved in valuation; we are unequivocally committed to meeting Client needs. On every engagement, direct Client access to the firm’s senior management is always the norm, never an exception.