Are There Estate And Gift Tax Valuation Discounts?
Yes! For gift and estate tax purposes, the value of a limited partnership interest is the price at which the interest can be sold to a hypothetical “willing buyer. ” Due to the restrictions on transfer of a limited partnership interest and because no partner has the unilateral right to liquidate the partnership ard take his share of the partnership assets the fair market value of the partnership interest is worth significantly less than the value of the assets held inside the partnership. The difference in the value of the partnership assets and the value of the limited partnership interests can often amount to 35% or more. This means that one can reduce the estate tax cost by 35% of the value of an asset simply by placing it in a limited partnership. This discounting is also available for making gifts since you are allowed only $12,000 gift tax exclusions each year. For example, suppose the underlying assets of a Family Limited Partnership are worth $2,400,000 and some parent wishes t
