Accountancy Associates, LLC
Defending The value gifted or contributed may be more costly than the cost of a business valuation
Under Section 6662 of the Internal Revenue Code, undervaluation penalties of up to 40% may be
assessed on the value of an asset (which includes owner stock or partnership interest) reported
for tax purposes, including gift, estate and generation-skipping transfer tax. The penalty is
applied to the difference between the taxpayer’s reported value and the IRS’ assessment of the
asset’s value.