A major activity of Hempstead & Co. is preparing valuations for estate and gift tax and estate planning purposes. The estate tax system of the US levies estate, gift and generation-skipping taxes on the basis of the fair market value of the assets in the estate. When these assets include an interest in a closely-held business, it is necessary to prepare a valuation of the business interest in order to determine the tax due.
The business interest being valued can be a controlling interest in a corporation or partnership, or a minority interest. A properly-prepared appraisal report comprehensively addresses all of the relevant factors that go into determining value, including assets, liabilities, income and cash flow. Hempstead & Co. carefully considers all elements relevant to the value, including the selection of the most appropriate valuation approach. We also give careful consideration to the application of various valuation discounts for elements such as lack of marketability and lack of control.
We have extensive experience in providing valuation advice in the formation of family limited partnerships and similar vehicles, and have dealt widely with the special discount issues these valuations entail.