S-Corp value for estate tax

[000000000000]

I own an S-Corp. What is its value for the purposes of estate tax and estate tax lifetime exclusion? How is it determined? Will it become part of my estate? Is there a way to optimize this out?

[RobertB4444]

It's value is your basis in it which is determined by what you have invested in it.  

Yes, everything that you own becomes part of your estate.  

I don't know what you mean by "optimize this out".  If you mean you don't want it to be part of your estate then you can sell it or give it away.  It's an S-Corp - you can dilute it's value but taking on additional members.

@000000000000 

[000000000000]

What if the value (basis) of this corp is negative? Will it add to the estate tax exclusion? Say if its basis is -$1,000,000. Does it allow me to exclude $13,000,000 instead of $12,000,000 from Fed estate tax?
And thanks for the dilution idea!

[RobertB4444]

In order to have a negative basis the S-corp would have to have equivalent debts.  In that case it would indeed reduce your estate because the debts would be included as part of your estate.

@000000000000 

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@000000000000 wrote:

I own an S-Corp. What is its value for the purposes of estate tax and estate tax lifetime exclusion? How is it determined? Will it become part of my estate? Is there a way to optimize this out?

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Yes, it will ordinarily become part of your gross estate.

The value for estate tax purposes will be the fair market value of the corporation on the date of your death (there are several approaches to valuing a going concern).

You should consult legal counsel and a tax professional in your area.