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Treasury Regulations · 26 CFR

§ 25.2512-3. Valuation of interest in businesses.

In effect eCFR current as of October 15, 2026

Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).

Regulation under 26 U.S.C. § 2512

Cite as 26 CFR § 25.2512-3

At a glance

Read from the text and its source citation. Not part of the regulation.

Status
In the current eCFR
Source
T.D. 6334, 23 FR 8904, Nov. 15, 1958; 25 FR 14021, Dec. 31, 1960, unless otherwise noted.
Issued under
26 U.S.C. § 2512
Length
223 words · about 1 min to read
Cross-references
cites 0 Code sections and 1 regulation; cited by 1
(a) Care should be taken to arrive at an accurate valuation of any interest in a business which the donor transfers without an adequate and full consideration in money or money's worth. The fair market value of any interest in a business, whether a partnership or a proprietorship, is the net amount which a willing purchaser, whether an individual or a corporation, would pay for the interest to a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant facts. The net value is determined on the basis of all relevant factors including—
(1) A fair appraisal as of the date of the gift of all the assets of the business, tangible and intangible, including good will;
(2) The demonstrated earning capacity of the business; and
(3) The other factors set forth in paragraph (f) of § 25.2512-2 relating to the valuation of corporate stock, to the extent applicable.

Special attention should be given to determining an adequate value of the good will of the business. Complete financial and other data upon which the valuation is based should be submitted with the return, including copies of reports of examinations of the business made by accountants, engineers, or any technical experts as of or near the date of the gift.

(b) [Reserved]

Other regulations under § 2512

Cross-references

Computed from the citations in the text of 26 CFR.

Regulations it cites

Cited by 1 other regulation

Where it sits in 26 CFR

  1. Subchapter B Estate and gift taxes
  2. Part 25 Gift tax; gifts made after december 31, 1954
  3. Transfers

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