Defined-value gifts — Give now, value later

Description

Abstract: Making large gifts can be a challenge if they consist of illiquid, difficult-to-value assets. They must be supported by a business valuation, and there’s a risk that the IRS will claim, years later, that a gift was undervalued for tax purposes. But, as this article explains, a defined-value gift — which is a gift of assets that equal a specific dollar amount, rather than a set number of FLP units or a fixed percentage of a business — protects against unexpected taxes down the road. With little time before this year’s record-high exemption amount expires, a defined-value gift can avoid the need for rushed valuations and unintended tax consequences.