Valuation of Assets - Private Foundation Minimum Investment Return: Reduction in Value for Blockage or Similar Factors


In determining the value of securities, a private foundation may establish that the price at which the securities could be sold outside the usual market may be a more accurate indication of value than market quotations, as a result of--

  • the size of the block of securities,
  • the fact that the securities are in a closely held corporation, or
  • the fact that the sale of the securities would result in a forced or distress sale.

In such a case, any reduction in value for all of these reasons together may not be more than 10 percent of the fair market value of the securities to which the discount applies.