Estates & Gifts Federal Appraisal, LLC provides appraisal services for gifting closely held stocks or interests in partnerships and real estate holdings and for IRS estate issues. Real Estate Appraisals for Estate & Gift Tax Purposes All appraisals are written for specific purposes. An appraisal written for one purpose may not be appropriate for use in another purpose. Appraisals ought to be written specifically for estate and gift tax purposes. Federal Appraisal specializes in appraisals for various IRS reporting purposes, such as Estate and Gift Tax purposes. Business Appraisals for Estate & Gift Tax Purposes Similar to the circumstances discussed above, business appraisals (appraisals of businesses and business intangibles) written for estate and gift tax purposes are distinct from appraisals for other purposes. Federal Appraisal specializes in such appraisals. See Business Valuation/Asset Type for more. Discount Studies Estate & Gift tax appraisal issues have become complex over the years. Essentially, property and business management require two distinct appraisals. The first is an appraisal of the underlying real property, business, or asset, with an undivided/fee simple interest. The second is an appraisal of the discount to be applied to the undivided/fee simple interest in order to find the value of a partial interest. These appraisals are commonly called “discount studies.” An essential part of the estate and gift tax analysis is the determination of the appropriate discount for partial interests.   The lack of control, the lack of influence on management, and the lack of marketability/illiquidity associated with a partial interest can often dramatically reduce the value of an asset, and hence the taxable basis.  When discounting for less than a controlling interest, several factors should be considered, including but not limited to: Lack of Control and Management size of interest and dispersion of voting interests limits to distributions restrictions on transfer of interest key person, general or limited partnership interest Lack of Marketability and Illiquidity restrictions on sale rights to partition blockage factors investor appetite for type of investment cost of delay and reduced cash flow indefinite or finite investment/partnership Form 8283Federal Appraisal, LLC has experience with and can certify (sign) Form 8283, Non-cash Charitable Contributions as well. Leveraged Reverse Freezes The process of undergoing a Leveraged Reverse Freeze can be highly complex. In a leveraged reverse freeze, a preferred partnership interest is exchanged for either a note, transfer of preferred partnership interest to a designated grantor retained annuity trust (GRAT), or other types of real estate planning means. The end goal of a leveraged reverse freeze is for the receiving family member or GRAT to receive a portion of the cash flow and appreciation after all interest payments/GRAT annuity payments have been accounted for. We at Federal Appraisal offer services to help those who interested, or may be interested, in partaking in a Leveraged Reverse Freeze.

Accounting, Tax, or Audit Federal Appraisal specializes in appraisal for accounting and tax issues. Whether your accounting/consulting firm is working on tax, audit, management consulting issues, or VFR/Investor Reporting, Federal Appraisal, LLC offers expert solutions. Our practice includes qualified real estate appraisers with designations by the Appraisal Institute (AI), the American Society of Appraisers (ASA), and the Royal Institution of Chartered Surveyors (RICS). Valuation for Financial Reporting Federal Appraisal, LLC is prepared to assist clients with Valuation for Financial Reporting. As the financial reporting industry continues to move toward global standards, it is relying less on historical cost-based accounting on the balance sheet and moving more toward a market based, fair value system. Statement of Financial Accounting Standards 157, Fair Value Measurements, defines fair value as: “The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” As Valuation Specialists, with strong backgrounds and certifications in valuation and financial reporting we are uniquely qualified to assist your company or clients with the following Valuation for Financial Reporting needs using generally accepted appraisal standards. cost benefit studies feasibility studies highest and best use analysis zoning studies rent studies property utilization studies market analysis forecasting and trend projections property tax consulting verify managements assumptions and estimates identify and test valuation techniques validate inputs for valuation techniques Tax and Audit Issues and Solutions Federal Appraisal, LLC has solutions for the following tax issues impacting real property: Real and Personal Property Taxes Purchase Price Allocation Studies Cost Segregation Studies transfer taxes gains taxes income taxes Estate & Gift Appraisals and Consulting International Financial Reporting Standards (IFRS) Some of the audit issues facing real property that Federal provides solutions for include: Impairment Studies corporate structuring management audits and consulting benchmarking and best practices consulting Federal Appraisal, LLC provides numerous services to assist property owners in managing the various taxes and audit issues that impact real and personal property, including: Property Tax Assessment and Appeal Appraisal useful life studies fixed asset registers special value reportingssynthetic leasessale-lease backsstructured leases Impairment Studies audit support consulting FASB Standard, Leases, ASC 842 Starting in 2019, public companies will need to report the value of operating leases on balance sheets. The impact to balance sheets could be significant. While the calculations of value for many such leases do not require the assistance of appraisers with special knowledge, some certainly do. The reporting may require net present value calculations using market terms. Furthermore, while addressing ASC 842, accountants may wish to address leases with above or below market terms (intangible assets or liabilities). Federal Appraisal can provide these services. Other Valuation Services Federal Appraisal, LLC also provides a variety of valuation services that relate to potential appraisal needs, including: accountingFASB 141R – business combinationsFASB 142 – goodwill and other intangiblesFASB 144 – impairment or disposal of long lived assetsFASB 133 – derivative securitiesFASB 123R – options/share-based payments FASB Interpretation No. 45 – debt/guarantees taxIRC Sec 1060 – purchase price allocationIRC Sec 1245/1250 – cost segregationIRC Sec 409A – stock based, nonqualified deferred compensation plansIRC Sec 108 – debt cancellationIRC Sec 382 – net operating loss limitationsIRC Sec 482 – transfer pricingIRC Sec 367 – reorganizationsIRC Sec 304 – deemed dividendIRC Sec 338 – foreign tax credit planningIRC Sec 861 – allocation of interest expenseIRC Sec 165(g)(3) – worthless stock deductionsForm 8283 – Noncash Charitable Contributions (Gift & Estate Tax) gift and estate tax valuation of closely held restricted stock otherasset-based financinginsurance appraisal services ad valorem opinion servicesfairness opinion solvency opinion Special Valuation Issues in Tax and Audit Federal Appraisal, LLC has solutions for the following uncommon issues impacting real property: self-managed 401K 1031 like-kind exchanges bargain/liquidation purchases/sales barter agreements before & after tax cash flow & income forecasts before & after tax returns & yields studies below market rate loan from parent casualty/losses charitable contributions/gifts comfort letters damages estimates depreciation & cost segregation property due diligence services easements employee stock options exchange basis fairness opinions foreclosure/recapitalization gift tax appraisals high basis / low value reorganization impairment studies incorporation increased basis in property prior to disposition insurance claims Lease Auditing & Analysis landmark easement contributions litigation support & expert testimony merger & acquisition valuations and consulting portfolio & mass appraisals preservation/conservation private REIT’s real property tax reviews REIT issues sale/lease backs & LILO’s tax estimations & projections tax shelters valuation management & audits valuation/real estate study reviews Management Consulting Issues and Solutions for Accountants Federal Appraisal provides user-defined scopes of services and agreed upon procedures services relating to accountants. Securities and Exchange Commission (SEC) Federal Appraisal, LLC provides the real estate appraisals and valuation reporting support required by the SEC. See our SEC page for more information. Internal Revenue Service (IRS) Federal Appraisal, LLC provides the real estate appraisals and valuation reporting support required by the IRS. See our IRS page for more information. Our Clients have chosen Federal Appraisal because we: Understand the key tax and accounting issues both domestically and internationally Are an independent firm with no Sarbanes-Oxley issues Deliver products and services accepted by the SEC, IRS and both the Big Four and regional accounting firms Federal Appraisal, LLC is not a law firm or an accounting firm. As such it does not offer legal or audit opinions. Federal Appraisal can obtain and/or manage those services for its clients, and Federal Appraisal can offer referrals to law firms and/or accounting firms for such services.

Property Tax Appeals Federal Appraisal provides complete property tax appeals services.  We provide:  Assessment review and strategy/goal planning - Is a property over-assessed, under-assessed, or fairly assessed?  What should the target reduction or increase be?  Is the likely reduction or increase adequate given the risks, timing, and costs? Compliance & document submissions and preparation Pre-Assessment presentations, submissions, meetings, and negotiations Representation/advocacy or appraisal services Informal appeal services Representation/advocacy or appraisal services Formal appeal services Process management and/or appraisal services and expert testimony Background Real and personal property  is taxed by state and local jurisdictions, based on the market value of the property. This kind of tax is known as an "Ad Valorem" tax, meaning "of value" or based on value as opposed to income or sales.  The process begins with an assessor's estimate of the market value of the property.  On occasions, the assessors use information the property owners must file with the assessors.  Often the assessor's estimate of market value is converted to an assessed value, before the tax rate is applied. The assessed value is a percentage of market value.  Property owners sometimes believe that they are under assessed because they fail to convert their assessed values back into market values in their assessment review process.   Real property taxes are levied in all 50 states and are common around the world.  Personal property is taxed in about 40 states.  They represent one of the major sources of funding for schools and local governments. The Appeal Process The property tax appeal process, unlike the income and sales tax reporting process, is reactive.  In income and sales tax reporting, the taxpayers calculate their taxes and the taxing jurisdiction deciding whether it wishes to dispute it.  In the property tax process, the assessor decides what the  property owner should pay and the property owner must then react and decide whether to dispute the assessment.  In most cases the process relieves the property owner of the time consuming and costly reporting burden because the assessors estimate an appropriate market value and assessment; however, for all high value properties, say $3,000,000 or higher, and all special purpose properties and all properties experiencing significant changes in value, prudent management dictates that the assessment must be reviewed by the property owner, whenever an assessment is established.  Many property owners fail to complete this essential activity.  The failure to appeal an assessment can result in the substantial overpayment of taxes. The appeal process may begin with properly prepared pre-assessment submissions, when required or when advantageous and permissible. Many jurisdictions allow meetings with the assessors prior to the establishment of assessed values.  This is a cost-effective way to secure a reasonable assessment.  The counsel of a property tax expert is strongly recommended for this process.  Once the assessment is establish, prudent managers should avail themselves of the informal and non-legal venues that some jurisdictions provide to tax payers.   Again, the counsel of a property tax expert is strongly recommended for this process.   Lastly, when the other venues prove unable to provide relief, a taxpayer can pursue their appeal in court or other formal, legal venue as per the taxing jurisdiction procedure.  The counsel of an attorney, an appraiser and a property tax expert is strongly recommended. Also see our Property Taxes and our Property Tax Management pages.