Return on Equity Analysis Undergirds Reasonable Compensation Claim

Business Valuation UpdateVol. 22 No. 7
Legal and Court Case Update
July 2016

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1771 Concrete Work
238110 Poured Concrete Foundation and Structure Contractors
federal taxation
expert testimony, reasonable compensation, sic code, guideline companies, comparable, deduction, risk management association, equity value
H.W. Johnson v. Commissioner
2016 Tax Court Memo LEXIS 94
May 11, 2016
US
Federal Court
Federal
United States Tax Court
Unknown (taxpayer/petitioner); unknown (IRS/respondent)
Gale

Summary

Tax Court says compensation paid to company owners for managing entity’s daily operations was reasonable; officers were “absolutely integral” to company’s success and company’s rate of return on equity after compensation accorded with industry average.

See Also

H.W. Johnson v. Commissioner

Full Text of Court Cases
May 11, 2016

Tax Court says compensation paid to company owners for managing entity’s daily operations was reasonable; officers were “absolutely integral” to company’s success and company’s rate of return on equity after compensation accorded with industry average.