Valuation for Estate & Gift Tax Reporting

About The Client

PCE represented the estate of a well-known personality that was in part invested in Florida citrus groves and packing houses.

Client Mandate

To establish the fair market value of the citrus holdings of his estate.

Transaction Strategy

PCE was provided with real estate appraisals that considered the market value of each property in a holding of over 20,000 thousand acres of groves on a stand-alone basis. Recognizing that bringing such a holding of citrus groves to the market simultaneously at the date of death would likely impact the value of grove land throughout Florida, PCE requested and received a real estate appraisal that takes into account “market absorption,” reducing the gross market value of the land holdings by way of a 30% discount for market absorption. In addition, PCE identified language in the operating agreement between the majority and minority shareholder (75:25) that supports the position that the minority had the right to block any sale of the assets whatsoever, rendering the majority powerless to transact.

Client Triumph

While the engagement involved only a small percentage of the holdings of the descendant, PCE was able to save the estate significant tax dollars to pass on to the next generation.