Business Valuation Update
- How to Review a Report’s Valuation Methodology
- Ideas for Solving Two Problems in the BV Profession
- How Do Your Firm’s Benefits Stack Up?
- Using Rule of Thumb Data to Uncover Cooked Books
Former Partner Must Compensate for Goodwill Attached to Ongoing Business at Same Location
The issue in this partnership dissolution was the division and valuation of goodwill in a barbershop.
Independent Verification of Data Critical in Two Divorce Cases
Divorce court discredits expert valuation for failure to independently verify information provided by the owner/husband.
Another Taxpayer Win: Court Accepts 47.5% Discount for Formed (But Not Funded) FLP
Court accepts combined discounts of 47.5% on transfers to an FLP, which was formed but not fully funded before the founder’s death.
IRS Burden of Proof Does Not Obviate Errors in Taxpayer Valuation
2nd Circuit rejects taxpayer’s contention that, should IRS fail its burden of proof, then the court must defer to estate’s valuation analysis.
Court Determines Value of Cashless Stock Options; Illusory Dividend Not Deducted From FMV
In this contract dispute, the principal valuation issue was the value of stock options that Colmen Capital Advisors Inc. (Colmen), had received for 20% of the common stock in Polpart Placements Inc. (Polpart) and Polar Plastics Inc. (PPI) in exchange for Colmen's turnaround work related to these and affiliated companies.
Price Paid PA&E Stockholders
This is the latest installment in the lengthy saga of Howard v. Shay , a case of ESOP participants suing for undervaluation on termination of the ESOP and sale of its 38.6% stock interest to a trust controlled by the controlling stockholder.
Court Determines Feasibility Requirements Not Met
The charge of the Bankruptcy Court was to determine whether the requirements for confirmation of a Chapter 13 personal bankruptcy reorganization were met, or whether the Chapter 7 liquidation case should be reopened.
Divorce Court Discounts for Flawed Comparables and for Lack of Control Regarding 50% Interest
Divorce court discounts for flawed comparables and lack of control in valuation of four related companies.
Faced With a $1 Million Gap in Appraisals, Court Appoints Its Own Expert
Rejecting both parties’ expert reports, court appoints its own expert to determine value of dissociated partner’s interest from LLC, including applicability of discounts.
Wisconsin Court Refuses to Apply Minority Discount in Dissenting Shareholder Case
SSM Health Care System (SSM), a minority shareholder of HMO-Wisconsin Inc. (HMO-W), appealed the circuit court decision to apply a minority discount when it valued the fair value of SSM's HMO-W's shares prior to HMO-W's merger with United Wisconsin Services.
Tax Court Accords Superpremium to Small Voting Block and Allows Deduction of 100% of Trapped-In Capital Gains Tax
Chris Mercer, president of Mercer Capital Management Inc., a leading independent business appraisal firm, abstracts and analyzes what is sure to be one of the most discussed U.S. Tax Court of 1999.
Gross Estate Includes Date-of-Death Value of Assets Transferred to Family Limited Partnership
The issue in this case was whether decedent's gross estate included the value of interests in two family limited partnerships: the Thompson Turner Family Limited Partnership ("Turner Partnership") and the Thompson Family Limited Partnership ("Thompson Partnership").
11th Circuit Affirms Shepherd v. Commissioner
This gift tax case is an appeal from the Tax Court's December 2000 decision, which was abstracted in the December 2000 issue of Shannon Pratt's Business Valuation Update®, at page 5.
Tax Court Determines Capital Gains Discount for Real Estate Holding Company
This issue in this estate tax matter is the fair market value of decedent's 82.76% interest in Valley Improvement Co. Inc. (VIC), a real estate holding company, as of Jan. 12, 1994.
Court Not Required to Reflect Subsequent Events
At issue in this appeal was the use of subsequent events in valuing the closely held stock of Schwan’s Sales Enterprises Inc. (SSE).
Judicial Buyout at Fair Value Trumps Buy-Sell at Book Value
Texas court of appeals affirms equitable award of fair value for oppression of 10% minority shareholder at “enterprise value” rather than at book value of buy-sell agreement, and upholds $300,000 award based on expert’s enterprise valuation.
Latest FLP Case Lists ‘Bad Facts’ to Avoid
Tax Court disallows FLPs based on numerous bad facts, including poor drafting, delayed funding, and exchange of founder’s interests for a private annuity from the minority owners.
Tax Court Accepts Negative Industry Risk Premium and Unique Combined Discount Matrix
The decedent, Helen Deputy, formed a family limited partnership comprised of 99% of a limited partnership interest retained by Deputy and two 0.5% general partnership interests, one held by Deputy and one held by her son.
Tax Court Resolves ‘Mismatch’ Between FLP Values and Marital Deduction
On a motion for reconsideration, Tax Court finds no new evidence or rationale to reverse its prior opinion, which included the value of family limited partnership assets in the gross estate; it also found the estate was not entitled to claim the marital d ...
Jelke Overruled: 11th Circuit Approves 100% Discount for Imbedded Capital Gains
11th Circuit rejects Jelke and adopts dollar-for-dollar discount for contingent capital gains tax liability.
Appraisal based on more than one valuation approach found more credible
The issue in this marital dissolution was the valuation of the husband's 2.18% interest in Wealth Enhancement Group (WEG).
Court Spotlights Lack of Control in Oil and Gas Interest Valuation
Appeals court affirms trial court’s discounting for lack of control and marketability in valuing oil and gas interests where trust’s ownership in interests was fractional and indirect and there was testimony regarding IRS’s estate tax discount rates.
DCF Method Appropriate for Valuing General Contractor
In 1992, May Rakow gave 1,780 shares of Illinois Hydraulic Construction Co. (IHC) stock to her children and grandchildren.
New Federal Case a ‘Must Read’ for Lost Profits/Lost Business Analysis
Two appraisers testify to lost profits and lost business analysis, defend against Daubert attack. Court examines search for comparables.
Tax Court Split 9 to 6 on Preserving Family LLC for Gift vs. Income Tax Purposes
In a 9-to-6 split decision, U.S. Tax Court decides that “check-the-box” regulations, which disregard the entity form of a single-member LLC for federal income tax purposes, do not apply to assessments of federal gift taxes.