By: Heather I-D Graham, CPA, CVA

Drafting Buy-Sell Agreements requires that special consideration be given to a number of special rules that affect valuations for estate and gift tax purposed.  For example, options to acquire property at less than FMV and restrictions on the right to sell property are generally disregarded in determining value.  An independent valuation, or the assistance of a valuator in deriving a formula approximating FMV at the date of the agreement helps insure the proper tax result of the Buy-Sell agreement.  Buy-Sell Agreements also have numerous other non-tax issues, all of which can be enhanced by a proper valuation formula.

The business valuation formula can be different or each business, depending on the industry, risks, and case circumstances.  If you need professional assistance, pelase give us a call.