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Advisory & Valuation·20 citations·Brief · sample·Generated June 2026

Research Result

Question: How do we value a CPA practice owner's interest for estate planning now that the OBBBA made the higher exclusion permanent? What valuation method is defensible against IRS scrutiny?

Practice Brief: CPA Practice Valuation for Estate Planning

Bottom line (1 sentence): The permanent $15M exclusion (OBBBA, enacted July 4, 2025) removes sunset urgency but defensible valuation still requires income approach (12–25% cap rate), market benchmarking (0.8x–1.5x revenue), and documented DLOM (25–35%) and DLOC (20–30%) supported by Rev. Ruling 59-60 and qualified appraisal.

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🟡 Monitor

  • OBBBA (P.L. 119-21, enacted July 4, 2025) made the $15M estate tax exclusion permanent under IRC § 2010(c)(3); 2025 exclusion remains $13,990,000, rising to $15M (indexed) for 2026 and beyond — OBBBA, P.L. 119-21

  • Attach qualified appraisal to Form 706 for any closely held business interest exceeding 5% of gross estate; appraiser must hold ASA, CPA/ABV, or equivalent credential and appraisal must be dated within 60 days of valuation date — Treas. Reg. § 1.170A-13(c)(3), (c)(5)

  • IRS challenges DLOM exceeding 35% and DLOC exceeding 25% absent case-specific documentation; use Mandelbaum factors, restricted stock studies (20–35% median), and partnership-specific transfer restrictions — Estate of Ludwick, T.C. Memo. 2010-104; Estate of Jones, T.C. Memo. 2019-101

  • Buy-sell agreements must meet IRC § 2703(b) safe harbor (bona fide business arrangement, arm's-length pricing, comparable terms) or IRS will disregard formula and apply FMV; update agreements every 3–5 years with qualified appraisal — Estate of Blount, T.C. Memo. 2004-116 (aff'd 428 F.3d 1338)

  • Segregate personal goodwill (non-transferable client relationships tied to decedent) from enterprise goodwill; personal goodwill not includible in estate under IRC § 2031 but IRS scrutinizes claims exceeding 40% of practice value — Martin Ice Cream Co. v. Commissioner, 110 T.C. 189 (1998)

🟢 FYI (Specialty Practices)

  • OFAC published Venezuela Sanctions Regulations Web General Licenses 48A, 49A, 5U, and 5V on June 10, 2026 — for practices advising energy/mining clients with Venezuelan operations | Document Nos. 2026-11616, 2026-11615

  • OFAC published Cyber-Related Sanctions Regulations Web General License 2 on June 10, 2026 — for practices serving technology/cybersecurity clients | Document No. 2026-11592

  • OFAC published International Criminal Court-Related Sanctions Regulations Web General License 11 on June 10, 2026 — for practices with international legal/compliance clients | Document No. 2026-11601

  • OFAC published Belarus Sanctions Regulations Web General License 14 on May 7, 2026 — for practices advising manufacturing/logistics clients with Belarusian exposure | Document No. 2026-09084

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