Estimating the value of the business is very important for a business man. A very common reason for business valuation is Gift and estate tax situation. In case, an owner passes away, the business is taken over by other partners or family members. One rather nasty task they need to handle quickly is how to pay the very large estate taxes.
The business people aim at highest possible business valuation result, but Gift and Estate Tax Valuation is something different. In this case, business owners try to get lowest possible tax value that they need to pay. Fair market value is the typical standard used to value businesses in gift and estate tax situations. The subtle difference you need to know about is that the definition of this standard may differ from that used in business acquisition scenarios.
Specifically, gift and estate tax valuations consider what the business is worth to a hypothetical business buyer without regard to special synergies that could result in a higher potential business selling price. If you plan to use the income based methods such as the Discounted Cash Flow, be aware that conservative earnings forecasts are usually acceptable as long as they are realistic. Gift and Estate tax valuations need to be calculated wisely as the tax officers will surely question if they find out the low tax amount for the business. Thus for Gift & Estate tax valuation, one must hire a business consultant with experience and perfection.
Foxboro- Consulting Group,Inc has the set of Business and Valuation advisors offering a full range of business valuation and asset appraisal services to a broad range of publicly traded and privately held business enterprises. From Real Estate Valuation to Business Enterprise Valuation, you get all at Foxboro-Consulting Group,Inc. For more information, visit our official website http://www.foxboro-consulting.com/.