Gift Tax Valuation (Form 709)

A gift tax valuation is a signed appraisal of a closely held business interest given during life, prepared for Form 709. FMV builds it to the adequate disclosure standard, so the IRS's three-year period to challenge the value begins to run.

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At a glance

Basis: IRC §2512 and Treas. Reg. §301.6501(c)-1(f)
Prepared by: A credentialed FMV valuation analyst
Deliverable: Signed report (PDF)
Used by: Accounting firms, financial advisors, attorneys
Delivered to: The ordering bank's or firm's vault and the client's vault

When it is needed

Annual exclusion and lifetime exemption gifts of business interests.
Transfers to trusts as part of an estate plan.
Any gift where the client wants the three-year statute of limitations to start.

What the report contains

Signed narrative report consistent with Revenue Ruling 59-60
Discounts for lack of control and marketability, with support
Adequate disclosure exhibits for the filing
Supporting schedules suitable for audit

Last updated October 24, 2026

Who uses it

Accounting firmsGift valuations cluster before April 15. Refer them early in the season and track each one to a signed report in your vault.Financial advisorsOrdered for business-owner clients in exit, estate, and liquidity planning.AttorneysPrepared for estate, gift, and business matters where other parties and their advisors will review the report.

Standards and sources

IRC §2512: Valuation of gifts
Treas. Reg. §301.6501(c)-1(f): Adequate disclosure
Revenue Ruling 59-60: Valuation factors
Revenue Ruling 93-12: Minority discounts in intra-family transfers

Documents we need

Entity documents
Financial statements, three to five years
Cap table or ownership ledger
Transfer terms

How an engagement works

Scope
We confirm the purpose, standard of value, valuation date, and addressee, then issue the engagement letter.
Intake
You or your client upload documents against a checklist. Open items stay visible until the file is complete.
Analysis
A credentialed analyst prepares the valuation and signs the conclusion.
Delivery
The signed PDF goes to your vault and your client's. We keep the workfile for later questions.

Gift tax valuation questions

What is a gift tax valuation?

A gift tax valuation is a signed appraisal of the fair market value of a gifted interest in a closely held business, such as stock or an LLC membership interest, prepared to support the value reported on Form 709. FairMarketValue (FMV) prepares it under IRC §2512 and Revenue Ruling 59-60.

When is a gift tax valuation needed?

A gift tax valuation is needed whenever a gift of a closely held business interest is reported on Form 709. In 2026, gifts above the $19,000 annual exclusion per recipient must be reported and use part of the donor's lifetime exemption, which is $15 million per individual in 2026.

What is adequate disclosure on Form 709?

Adequate disclosure is the level of detail Treasury Regulation §301.6501(c)-1(f) requires for a reported gift, including a qualifying appraisal or a detailed description of the valuation method. When a gift is adequately disclosed, the IRS generally has three years to challenge its value.

Are discounts allowed on a gifted minority interest?

Yes, where the evidence supports them. A minority, non-marketable interest is typically valued with discounts for lack of control and lack of marketability, and Revenue Ruling 93-12 confirms that family ownership is not attributed to the gifted interest.

What documents does a gift tax valuation require?

A gift tax valuation requires the entity documents, three to five years of financial statements, the cap table or ownership ledger, and the terms of the transfer.

How is the fee for a gift tax valuation set?

FMV quotes the fee for a gift tax valuation after reviewing the scope. The fee is fixed before work starts and does not depend on the conclusion of value.