Cal. Code Regs. tit. 18 § 15551.14
In determining the value of any business, or interest therein, transferred without an adequate and full consideration in money or money's worth, a fair appraisal as of the date of the gift should be made of all the assets of the business, tangible and intangible, including good will, and the business or interest therein should be given a net value equal to the amount which a willing purchaser, whether an individual or a corporation, would pay therefor in view of the net value of the assets of the business and its demonstrated earning capacity.
All factors relative to the valuation of other property, if applicable, will be considered in determining the valuation of a proprietary or partnership interest in a business. All evidence bearing upon such valuation should be submitted with the return, including copies of reports in any case in which examinations of the business have been made by accountants, engineers or other technical experts as of or near the date of the gift.
NOTE: Reference: Section 15551, Revenue and Taxation Code.
Cal. Code Regs. Tit. 18, § 15551.14