Business owners may be able to transfer wealth more tax efficiently by gifting ownership interests to family members. For 2026, the gift tax annual exclusion is $19,000 per recipient.
Certain interests may qualify for valuation discounts. For example, a minority interest may qualify for a lack-of-control discount because the holder can’t dictate business decisions. A lack-of-marketability discount may apply when there’s no ready market for selling the interest. Assuming a combined discount of 25%, this year you could gift an interest worth up to $25,333 (on a controlling basis) tax-free because the discounted value wouldn’t exceed the $19,000 annual exclusion. Contact the office to learn more.
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