Wonderful experience with the entire team. We received a full appraisal that was very thorough and included everything we needed as a nonprofit from an appraisal company to accept a donated vehicle and provide the appropriate documentation.
BUSINESS INTEREST DONATIONS
Business Valuation
Business valuation services for donated ownership interests and IRS Form 8283 filings, prepared in accordance with USPAP. Legacy Donation Appraisers values closely held corporations, LLCs, partnerships, and minority ownership interests nationwide.
- USPAP-compliant appraisals for donated business and ownership interests
- Qualified appraisal required above $5,000, with Form 8283 Section B and Part IV
- Private company shares don't qualify for the publicly traded securities exception
BUSINESS INTERESTS
Private Companies Don't Trade on a Public Market
A closely held business often represents the largest asset a family or founder owns, and its equity can carry substantial unrealized value that never shows up on a personal balance sheet. Donating shares, membership units, or a partnership interest instead of cash lets an owner support a cause while avoiding the capital gains tax that a sale of that stake would trigger.
Because there is no public market price for a private company, the IRS leans heavily on the qualified appraisal requirements for these gifts: income, market, and asset approaches all have to be weighed and reconciled into a single supportable conclusion of value.
Business interest donations often move through a charitable remainder unitrust (CRUT) or a donor-advised fund rather than a direct gift, and the valuation has to hold up under that structure as well as under IRS review.
IRS RULES
What the IRS Requires for Business Interest Donations
Qualified Appraisal Above $5,000
When the deduction is more than $5,000 for an item or group of similar items, the IRS requires a qualified appraisal by a qualified appraiser and Section B of Form 8283, which the appraiser signs in Part IV and the charity acknowledges in Part V.
Private Shares Need an Appraisal
Nonpublicly traded stock isn't covered by the publicly traded securities exception, so a gift claimed above $5,000 needs a qualified appraisal, and shares of the same private stock count as similar items.
The 60-Day Window
The appraisal must be signed and dated no earlier than 60 days before the contribution and received before the due date, including extensions, of the return that claims the deduction.
Over $500,000, Attach It
For donations valued at more than $500,000, the qualified appraisal itself must be attached to the return.
Similar Items Count Together
Items of the same general category, such as coin collections, paintings, books, clothing, jewelry or nonpublicly traded stock, are added together for the $5,000 test, even when they go to more than one charity.
Held a Year or Less
Capital assets held for 1 year or less are ordinary income property, so the deduction is generally limited to fair market value minus the short-term gain, in practice the cost basis.
ENTITY TYPES
The Business Structures We Value Most
Corporations, LLCs, and Partnerships
Most donated business interests come from closely held entities structured as corporations, limited liability companies, or partnerships.
Common entity types include:
- Closely held C-corporations and S-corporations
- Limited liability companies (LLCs)
- Partnerships and family limited partnerships
- Sole proprietorships
Minority, Controlling, and Membership Interests
The specific type of ownership stake, not just the entity type, determines which valuation approach and discounts apply.
Common interest types include:
- Minority ownership interests
- Controlling ownership interests
- Membership and shareholder interests
- Franchise interests
Professional Practices and Holding Companies
Professional practices and holding companies carry their own valuation considerations tied to licensing, goodwill, and underlying asset composition.
Common entity types include:
- Professional practices (medical, dental, legal, accounting)
- Family businesses
- Real estate holding companies
- Investment holding companies
GIVING STRUCTURES
Business Interests Are Often Donated Through a Trust or Fund
Charitable Remainder Trusts (CRTs & CRUTs)
A business interest funds the trust, providing income to the donor while the remainder eventually passes to charity.
Donor-Advised Funds (DAFs)
Shares or membership interests transfer to the fund, which typically arranges a later sale; the appraisal values the interest itself, not the eventual sale price.
Private Foundations
Family-controlled foundations frequently receive closely held stock or partnership interests as part of a broader estate or succession plan.
HOW IT WORKS
How We Value a Donated Business Interest
- 01
Financial Document Review
We review 3-5 years of financial statements, tax returns, and organizational documents such as operating or shareholder agreements.
- 02
Approach Selection
We weigh the income approach (discounted cash flow), market approach (comparable transactions), and asset approach based on which fits the entity best.
- 03
Discount Analysis
Minority and lack-of-marketability discounts are applied and documented where the donated interest lacks control or a ready market.
- 04
USPAP-Compliant Report
We prepare a written valuation report stating fair market value and the methodology used to reach it.
- 05
Form 8283 Part IV Completed
Our appraiser signs the Appraiser Declaration in Part IV so your donation is ready to file with Section B.
Gifting Business Interests Before Year-End?
The appraisal can be signed no earlier than 60 days before the gift, so time the valuation to the transfer date.
PRICING
What Determines the Cost of a Business Interest Appraisal
Entity Complexity
A single-member LLC prices differently than a multi-tier holding company or a business with multiple classes of stock.
Number of Ownership Interests
Valuing several interests, or interests held by multiple family members, adds separate analysis to the assignment.
Completeness of Financial Records
Organized financial statements and tax returns speed the work; missing records mean more time spent reconstructing the picture.
Minority and Marketability Discounts
Interests that lack control or a ready market require documented discount analysis supported by market data.
Industry and Available Comparable Data
Specialized industries with limited comparable transaction data call for more research to support the conclusion.
Your Deadline
We confirm timing up front, including whether expedited service is available for your filing or transfer date.
CLIENT VOICES
What Donors and Advisors Say About Our Appraisals
We had a very unusual appraisal request for merchandise valued at over half a million dollars, and the team handled it quickly and thoroughly. We will definitely return for any future appraisal needs and highly recommend them to anyone in need of appraisal services. – TGBA, Inc., Tampa, FL
Very thorough and professional — great communication and outstanding service. Highly impressed with their work!
CREDENTIALED APPRAISERS
Credentialed by the ASA, NACVA & AICPA
Every business valuation is prepared in accordance with USPAP by appraisers holding credentials with recognized organizations.
American Society of Appraisers (ASA)
National Association of Certified Valuators and Analysts (NACVA)
AICPA, Accredited in Business Valuation (ABV)
RELATED SERVICES
More Donation Appraisal Services
Inventory Appraisal for Charitable Donation
USPAP-compliant appraisals of donated retail, wholesale, and business inventory.
Machinery & Equipment Appraisal for Charitable Donation
USPAP-compliant appraisals of donated manufacturing, construction, and agricultural equipment.
Cryptocurrency Appraisal for Charitable Donation
USPAP-compliant appraisals of donated Bitcoin, Ethereum, and other digital assets.
BUSINESS VALUATION QUESTIONS
Business Valuation Donation Questions
Do I need a qualified appraisal to donate a business interest to charity?
Yes. When the value of donated business or ownership interests exceeds $5,000, the IRS requires a qualified appraisal, since nonpublicly traded stock doesn't qualify for the publicly traded securities exception. The donor completes Section B of Form 8283, and our appraiser completes and signs Part IV, the Appraiser Declaration.
Are minority ownership interests discounted in the valuation?
Yes. Minority interests that lack control are typically valued at a discount to reflect reduced control and marketability. We document the specific factors, such as voting rights, distribution rights, and lack of a ready market, that support the discount applied.
Can I donate a portion of my business, or does it have to be the entire company?
Both are possible. Partial interests require valuation of that specific stake, not just a pro-rata share of the whole company's value, since control and marketability differ from a full-company sale.
What documents do you need to value a closely held business?
We typically need 3 to 5 years of financial statements and tax returns, current interim financials, organizational documents such as an operating or shareholder agreement, and information about ownership structure and any relevant contracts.
How much does a business valuation for a charitable donation cost?
Fees are quoted as a fixed fee before any work begins, never hourly. Scope depends on entity complexity, the number of ownership interests, and how complete your financial records are.
How long does a business valuation take?
Turnaround depends on entity complexity and how complete your financial records are. Tell us your deadline, including any filing or transfer date, and we'll confirm up front whether we can meet it; expedited service is available.
When does the appraisal need to be signed relative to the donation date?
The appraisal must be signed and dated no earlier than 60 days before the date of the contribution, and it must be received before the due date, including extensions, of the return that claims the deduction.
Does the appraisal itself need to be attached to my tax return?
Only when the claimed deduction exceeds $500,000. In that case, the IRS requires the qualified appraisal itself, not just the appraisal summary on Form 8283, to be attached to the return.
GET STARTED
Get Your Business Valued
Scoped to your entity, quoted as a fixed fee.