QUESTION
Do I need to get a formal appraisal if I'm gifting a percentage of a family LLC to my children?
Asked on May 20th, 2013 on Estate Planning - Michigan
More details to this question:
The only thing owned by the Limited Liability Company is a brokerage account that contains only liquid stocks and bonds. Each month, the company receives a statement from the brokerage listing its holdings and the net asset value of the account.
10 ANSWERS
3 Awards
If you are using the fair value of marketable securities then a letter from the brokerage addressing the value on the day of trade may be sufficient. The statement is generally not sufficient as it only has the closing price for one day of the month on it. Values are usually not the closing value but an amalgamation of prices throughout the day in question. This information is only intended to give general information in response to an inquiry. It does not establish an attorney client relationship. This response is only based upon the limited facts presented and is merely intended to assist you in determining if you should contact an attorney to provide you with legal advice.
Answered on May 22nd, 2013 at 8:34 PM
Yes. There are no exceptions.
Answered on May 22nd, 2013 at 7:59 PM
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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No.
Answered on May 22nd, 2013 at 11:36 AM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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Under these circumstances, an appraisal does not make sense. You will need to keep statements, however, in case the value at the time of gift is ever questioned.
Answered on May 22nd, 2013 at 11:11 AM
2 Awards
No, but be careful that you do not exceed the annual gifting amount for each child. $13,000 per person (you) or $26,000 per couple (you and your spouse).
Answered on May 22nd, 2013 at 11:11 AM
Probate Attorney serving St. Louis, MO
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Edward L. Armstrong, P.C.
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The reason for the appraisal would be to establish the value of the gift as of the day it was finalized. How often are he underlying investments valued (this might be determined by how the investment company does its statements - e.g., quarterly, annually? monthly?).
Answered on May 22nd, 2013 at 9:56 AM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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No, you don't need a formal appraisal.
Answered on May 22nd, 2013 at 9:56 AM
Probate Attorney serving New Orleans, LA
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James G. Maguire
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During your lifetime, you are entitled to give away $1 million without paying gift taxes. If the value of the assets you are giving to your children is less than that, there would be no need for an appraisal.
Answered on May 22nd, 2013 at 9:55 AM
No, you can use the prices on the date of the gift.
Answered on May 22nd, 2013 at 9:55 AM
Business Law Attorney serving Livonia, MI
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Gerald A. Bagazinski
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No the fair market value of the securities is the value. If the LLC contained real estate or an interest in a closely held company, my answer would be different.
Answered on May 22nd, 2013 at 9:54 AM