A lot has been said and written about valuing pass-through entities. Business appraisers who have been around for a while and who have followed the ebb and flow of debate and consensus, have watched the thinking on S corporations evolve significantly over the years. For those new to the topic, it may be challenging to know where to start, let alone to navigate and parse through all of the research and varied opinions on the topic. For this reason, we recently asked valuation expert and former IRS territory manager, Michael Gregory, to share his list of essential reading for business appraisers preparing to value an S corporation.
- “Tax Affecting S Corporations: It’s Not a Matter of Whether. It’s a Matter of When,” by Alan Zipp, Business Valuation Update;
- Valuation of Pass-Through Entities: Looking at the Bigger Picture, by Keith Sellers and Nancy Fannon, 2012 American Taxation Association Midyear Meeting: JLTR Conference;
- How the IRS Values Non-Controlling Interests in S Corps With Job Aid Commentary by the Original IRS Champion, by Michael Gregory;
- “A Hands-on Approach to S Corporation and Pass-Through Entity Valuations,” by Paul R. Hyde and Shawn M. Hyde, IBA Business Appraisal Practice;
- “Tax Benefits as a Source of Merger Premiums in Acquisitions of Private Corporations,” by Merle M. Erickson and Shiing‐wu Wang, The Accounting Review;
- Cost of Capital: Applications and Examples, 5th edition, Chapter 37, by Roger Grabowski and Shannon Pratt;
- “The Moderating Effects of Acquisition Premiums in Private Corporations: An Empirical Investigation of Relative S Corporation and C Corporation Valuations,” by James A. DiGabriele, Accounting Horizons;
- “How the New QBI Deduction Impacts the Hypothetical Buyer and Seller,” by Mark O. Dietrich and Kevin R. Yeanoplos, Business Valuation Update.
- Taxes and Value: The Ongoing Research and Analysis Relating to the S Corporation Valuation Puzzle, by Keith Sellers and Nancy Fannon; and
- Revenue Ruling 59-60.
While this is by no means a complete list, it includes some of the key publications Gregory recommends to help you get your arms wrapped around the topic of S corporation valuation. Find additional articles, books, and webinars on the topic of pass-through entities with BVResearch Pro.