As Seen in Philadelphia Business Journal
So, you’re ready to hand over the reins to your family business, but not all at once. First identify to whom the business should be transferred, then determine how to effect the transfer. You can structure a transfer through gifting portions of the actual business interest. You can use the $14,000 annual gift tax exclusion, allowing you to transfer small pieces of your business over a period of years without paying tax or using your lifetime exemption. To gift a good portion of the business, advanced planning and annual valuations must occur. To transfer larger amounts, consider using some or all of your lifetime exemption—$5.49 million in 2017. A married couple will be able to shield nearly $11 million from federal estate and gift taxes. This gives business owners considerable latitude to transfer a part or all of the business.