How would you structure a partial transfer of ownership in the business to Cindy and Luke...

How would you structure a partial transfer of ownership in the business to Cindy and Luke to achieve a fair market value of the transfer that is less than Cindy and Luke’s proportionate share of the $10,000,000 value?

Are there any penalty concerns associated with the valuation discounts that your proposed transfer takes advantage of, especially if the valuation is found to be inaccurate?

Expert Solution

Answer:

Limited liability Company:

For Our situation Partial Transfer Of Ownership in the Business by Proper Valuation Discounting. It starts With the first step of breaking down the Fair Market value(FMV) of essential association Assets .Once It is analysed,next venture of rebate examination will be performed to touch base at FMV of enthusiasm being talented.

*Two Discounts connected for the most part in Family Limited Partnership. They are clarified as underneath:

a).Discount for Minority(or)Non-controlling Interest.

b).Discount for Lack of Marketability.

In this way Finally the Assets of association ought to be assessed by Qualified valuation Consultant.

Be that as it may, in some cases May be Two(or)more individuals Appointed.

Penalities if any Understatement Substantial Valuation Misstatement:

IRS Audits the endowments of marked down enthusiasm for FLP.When they evaluate that is forceful discounts,it may bring about Additional Gift Tax and furthermore Penalty of 20-40% of modest representation of the truth of duty because of error of Valuation.

ekkarill92 answered 1 year ago

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