Tax law frequently deals with the issue of valuation of an asset. How much something is worth is very important for many tax questions. Certain methods of holding assets can be used to decrease its value for tax purposes. This is done through transfers, sales or gifts of business or property interests. If you own 35% of an asset, your spouse owns 35% of an asset, and your children own the remaining 30% of an asset, on your death you are a minority owner of that asset under the tax law. You in all probability own an asset that is not easily transferable because there is no public market for the sale. The IRS Code says the value of an asset would be that price agreed upon by a reasonable Buyer and a reasonable Seller, each of which wanted to buy and sell and each knew all of the relevant facts. The issue is then, what would a reasonable Buyer pay for your 35% interest. Obviously, everything has a price and nothing is worthless. The assets value is 100%. What discount from 35% would be appropriate for the holding of that minority interest asset? A 30% discount would provide a 10.5% reduction (.35 X .30 = .105). The asset is worth .245 of value (.35 - .105 = .245). The value of the asset of $100,000 X 35%= $35,000 but the value for tax purposes is $100,000 X 24.5% = $24,500 SAVINGS     $10,500