A member of the IRS staff of experts who review taxpayer-provided appraisals for estate and gift tax purposes tells BVWire of an article in the Journal of Entrepreneurial Finance, “Determining Lack of Marketability Discounts: Employing an Equity Collar” by Lester Barenbaum, Walter Schubert, and Kyle Garcia.
Better way: “The hypothetical framework developed by the authors more closely mirrors an investor’s financial realities in holding a non-marketable interest in a closely-held company than do the more widely accepted synthetic put option models,” says Harry Fuhrman, an IRS financial analyst who was formerly with Deloitte. The authors conclude that the DLOM resulting from the synthetic put option model is substantially overstated. Fuhrman, whose opinions are his personal views and not those of the IRS, says the article is well written with a well-laid-out analysis and deserves attention.
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DLOM survey: We are about to close our survey on the use of DLOM methods, so, if you haven’t taken it yet, please do so by clicking here. And make a note that, on December 8, BVR will present a special four-hour DLOM Day: An Advanced Workshop.
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