Blockage and Absorption Discounts: Definition, History, and Practice
Training Event Transcripts
August 3, 2017
Dan Pannese, CPA/ABV/CFF, CVA, CSEP, MST
Edward Pratesi, CPA/ABV, ASA, CM&AA, CVA
Whether in the form of the holding of publicly traded securities or other asset classes (art, real estate, personal property), significant blocks of these assets may upset the balance in their respective markets, leading to an inability to transact all in a day or reasonable time period. Blockage discounts are discussed primarily for stock holdings, whereas an absorption discount is typically applied to real estate, art, and personal property. Join experts Ed Pratesi and Dan Pannese as they cover the history and the IRS’s position on these adjustments as well as present criteria to consider in the determination of blockage or absorption discounts. Court cases are cited highlighting the decision-making process, as well as case studies to make sure you have practical guidance for your next assignment.