Court Deems Treatment of S Corp Undistributed Income ‘Problematic’

Business Valuation UpdateVol. 20 No. 12
Legal and Court Case Update
December 2014
3728 Aircraft Parts and Auxiliary Equipment, NEC
336413 Other Aircraft Parts and Auxiliary Equipment Manufacturing
expert testimony
child support, distribution, s corporation, retained earnings, business judgment, capital intensive, excess working capital

Diez v. Davey
2014 Mich. App. LEXIS 2041
October 23, 2014
US
State Court
Michigan
Court of Appeals
Justin Cherfoli
Hoekstra

Summary

Court rejects expert’s “excess working capital” analysis to determine income for child support purposes saying it conflicts with state statute’s requirement to rely on historical practices when assessing legitimacy of undistributed earnings of an S corp.

See Also

Diez v. Davey

Court rejects expert’s “excess working capital” analysis to determine income for child support purposes saying it conflicts with state statute’s requirement to rely on historical practices when assessing legitimacy of undistributed earnings of an S corp.