Legal Question in Wills and Trusts in Michigan

QFOBI and LLC valuations

I am trying to determine how to report valuations in a 706 where there is a family business set up as an LLC. The law says that when valuing an LLC you can only get a discount up to the fair market value of the owner's share, but valuation of a QFOBI allows up to a $1.3 million discount. How does one reconcile the difference?


Asked on 6/26/02, 10:45 am

1 Answer from Attorneys
Geoffrey Lahn Lahn, McDonagh, and Brown, PLLC

Re: QFOBI and LLC valuations

I am going to assume that I am writing this response to the Personal Representative of a decedent's estate. Your question is difficult to answer without having the numbers (actually amounts) on hand and more information on the person's business interest and his or her estate, I would need to know several things about the business: 1) does the business qualify for the qualified family owned business interest election under IRC 2057, and if so should the election be made; and 2)what amount was claimed as a unified credit. These are just a few of the questions I would have for you based on the question as submitted I would consult with either an attorney who specializes in these kinds of estate planning issues or a qualified CPA firm - for clarity in answering your question.

If I can be of assistance do not hesitate to call me directly at (734) 944-2269

Kindest Regards,

Geoff Lahn

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Answered on 6/26/02, 12:51 pm


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