Death of a member
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Death of a member When a member dies, is the valuation date the date of their death or 2 days prior to the first meeting after their death.
Whatever your club by-laws/operation procedures state it should be.
Bob Mann
To determine the amount the club owes the estate, Bob is correct--use the date prescribed in the partnership agreement. In many partnership agreements, the date of death is treated the same as the date of a letter of resignation. The valuation date is then the valuation date for the second meeting after the date of the resignation letter. But the particulars of your partnership govern so your mileage may differ. As a courtesy to the estate, you should also provide a valuation as of the date of death. The estate needs this figure to establish the basis value for estate tax and inheritance purposes. Jack Ranby Thank you so much for your answers. That helps alot.
On Thursday, September 9, 2021, 01:37:08 PM CDT, John W Ranby Trustee PGM Cariboo Trust via bivio.com <user*15792700001@bivio.com> wrote:
To determine the amount the club owes the estate, Bob is
correct--use the date prescribed in the partnership agreement. In many partnership agreements, the date of death is treated the same as the date of a letter of resignation. The valuation date is then the valuation date for the second meeting after the date of the resignation letter. But the particulars of your partnership govern so your mileage may differ. As a courtesy to the estate, you should also provide a valuation as of the date of death. The estate needs this figure to establish the basis value for estate tax and inheritance purposes. Jack Ranby The club should not provide a date of death valuation as a courtesy since it generally will be wrong. The correct valuation for Estate Tax purposes is not the closing price on any given date, For a single stock, the date of death valuation is the average of the high and low for the day. If there was no trading on that day, you take the high/low averages for the two closest surrounding trading days and take the weighted average of these amounts. For a partnership, you would use the death of death valuation statement only if the club sets all valuation dates equal to the transaction date. If the club uses a "scheduled" valuation date (such as, end of month, x days before meeting, etc.) then it would use the weighted average of the surrounding valuation dates to determine the date of death value. The unit value shown on a valuation report is only valid for Estate Tax purposes if any member could have executed a transaction on that date at that unit value. (In other words, just because you can calculate a value, doesn't make it correct.) See 26 CFR 20.2031-2(b)(2) for specifics and 20.2031-2(b)(3) for examples. Fortunately, very few estates have to concern themselves with this with the current lifetime exemption as high as it is. Ira Smilovitz, EA Fortunately, under the current Estate Tax rules, most decedents will not need to file an Estate Tax return. On Thu, Sep 9, 2021 at 2:37 PM John W Ranby Trustee PGM Cariboo Trust via bivio.com <user*15792700001@bivio.com> wrote: To determine the amount the club owes the estate, Bob is Thank you for the clarification, Ira. |
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