Tax and Business Succession

First, you’ve got to know the value of the business.

If you’re considering retiring and/or transitioning ownership of your business to the next generation, there are many issues to consider from a valuation perspective.

Do you have enough assets to retire when and how you want? When one of your primary assets is a closely held business, you can’t begin to answer that question without first knowing its value.

Maybe you’re hoping to transfer the wealth you’ve accumulated in your business to your children and minimize your estate taxes at the same time? By using a gifting strategy you may be able to do just that. However, the IRS may scrutinize any required gift tax returns to make sure you’ve provided “adequate disclosure” – a qualified appraisal by a qualified appraiser. That makes credible valuation a significant planning and compliance issue.

More valuation issues for closely held businesses

Each adjustment to the ever-changing tax laws affects your ability to transfer and preserve hard-earned wealth. And it may be difficult to assign a value to your closely held business since no market share price is available. Perhaps you want or need to exit the business but don’t know where to start. And, just what would happen to the value of the business and your interest in it, if something happened to you or another key owner?

You need a strategy

Simply stated, you need a strategy to make wise decisions about transferring or selling ownership – and that’s not possible without knowing what your business is worth.

Your McGladrey team includes valuation, tax, industry, transactional and financial planning professionals – all under one roof – who will collaborate with you to help you realize your goals. For decades, we’ve helped business owners in virtually every industry assess, protect and maximize a lifetime of effort for retirement and future generations.

We offer support in one or more of these areas:

  1. Consulting assistance to help you prepare your business for sale or transfer of ownership to another owner or family member. If that’s your goal, our transaction team may recommend preliminary steps, including maximizing cash flow, stabilizing the business and defining your exit strategy – even helping you evaluate your current management. All these factors affect your business valuation.
  2. Valuation calculations leading to an “estimated” value for your business. Using proven business valuation methodologies, our professionals will help you arrive at an estimated value so you can begin planning for what’s next for you and your business.
  3. An appraisal by our accredited valuation experts provides an opinion of value that can be attached to a federal gift or estate tax return, which will satisfy the IRS’s “adequate disclosure” requirements and provide credible evidence of the value of the asset(s) transferred.

When you want to know what it’s worth, call McGladrey.