Some appraisers say continued planning delays by some companies may prevent business owners from taking advantage of favorable tax laws
regarding gift tax exemptions.
The current lifetime gift tax exemption of $5.12 million is currently set to expire at the end of the year. Because of that, many business owners have chosen to create trusts to pass their business or real estate assets to their successors before 2013 begins.
However, many in the appraisal industry told Reuters that they are seeing a surge in appraisal requests because so many business owners are attempting to take advantage of the current estate tax laws. One veteran appraiser remarked that his business is busier than it has been in 50 years.
That increased demand means companies that delay too long in obtaining a valuation of their business or property may not be able to find a qualified appraiser able to meet the deadline.
“We’re sort of in a perfect storm right now because the gift tax exemption is higher than it’s ever been, and the value of businesses are at an all-time low, which makes it a perfect time to gift them,” Karen Goldberg, president of the Estate Planning Council of Manhattan, told Reuters.
Demand is expected to increase even further following Labor Day, since Goldberg added that many business owners and executives take time off during the summer months and may not begin the process until after they return.
Appraisers told the news source that the normal turnaround time for an appraisal is anywhere from four to eight weeks. That timeline may become stretched, with the additional work creating delays. The gift tax and appraisal paperwork would need to be completed before 2012 tax returns are filed next year to take advantage of the 2012-level exemption.