Gift tax valuation is a critical process in the United States for individuals transferring property or assets to another person without receiving full market value in return. The valuation determines the fair market value of the gifted assets at the time of transfer, which is essential for calculating potential gift tax liabilities. This is especially relevant for gifts that exceed the IRS’s annual exclusion limits, requiring accurate documentation to avoid penalties or audits.

Commonly valued assets include real estate, closely held business interests, stocks, and other personal property. Because the IRS scrutinizes significant gifts, valuations must be conducted according to established appraisal standards and often require the expertise of a qualified appraiser or valuation analyst. The goal is to provide an objective and well-supported valuation that reflects what a willing buyer would pay to a willing seller under normal market conditions.

Gift tax valuation is also vital for estate planning, as it can impact the lifetime gift tax exemption and influence estate tax calculations. Ensuring a compliant and defensible valuation helps preserve wealth, maintain transparency, and reduce potential disputes among recipients or with tax authorities. It forms a foundational part of effective wealth transfer strategies in the U.S.