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
Effective use of the business appraiser in a divorce case
A Florida jurist who has presided in both criminal and family court describes the difference in litigants by noting, "In criminal court one can see bad people on their best behavior. In family co ...
Reviewing case law helps avoid most frequent errors
Miriam Mason and Michael Cohen presented a seminar at the 1999 AICPA National Business Valuation Conference, December 5-7, 1999, in Las Vegas, Nevada. The title of the presentation was From a Matrimo ...
Buy-sell agreements: write 'em right!
Business valuation professionals are often called on to clean up the carnage of buy-sell agreements gone sour, or worse, to attempt to value an ownership interest without any type of agreement already ...
IRS proposes new rules for reporting gifts; Statute of limitations welcome, but some proposed requirements difficult
Certainly taxpayers welcome the provision of the Taxpayer Relief Act of 1997 that starts a three-year statute of limitations on revaluation when a proper gift tax return is filed, whether any gift tax ...
Business appraisal methodology
As a business valuation expert with Sanli, Pastore & Hill, Inc., I recently performed an interesting valuation of a hotel in North Platte, Nebraska. North Platte has a population of 25,000 and i ...
A lawyer's guide to asset-based approaches to business valuation
Generally, asset-based approaches to valuation deal with a simplified view of the net assets and liabilities of a corporation. Fair market value is determined under asset-based approaches by using the ...
Valuation Discounts Not Permitted in Light of Possible Section 691 (c) Deduction
The IRS denied discounts for potential income tax and lack of marketability in determining the value of the estate’s several IRAs.
Estate of Berg v. Commissioner
On appeal by the estate, the 8th Circuit Court of Appeals found that discounts of 20% for minority interest and 10% for lack of marketability of the estate shares were appropriately applied when determining the value of the estate’s 26.92% stock holdings.
Estate of McCormick v. Commissioner
One of the issues in this estate and gift tax case was the appropriate marketability discounts applicable to two partnership interests decedent owned on several different valuation dates (the dates of various gifts of the partnership interests).
No Valuation Discounts Permitted for Real Property Partnership
The Oregon Court of Appeals determined that minority and marketability discounts should not be applied to partnership interests in timberland because the partnership agreement provided that, in the event a partner wished to withdraw, the remaining partner ...
Bright-Line Rule Barring Discounts Is Inappropriate
The Washington Court of Appeals reversed a trial court’s bright-line rule prohibiting discounts for lack of marketability and built-in capital gains taxes when determining fair value in a dissenters’ rights action.
Application of Discounts Inappropriate
The Colorado Court of Appeals considered the valuation of a bank holding company in this dissenting shareholder action. It determined that minority interest and lack of marketability discounts were inappropriate in dissenting shareholder actions as a matt ...
Officers’ Compensation Considered in Value of Company
The New Hampshire Supreme Court affirmed the lower court’s treatment of the husband’s compensation and the application of combined lack of marketability and minority interest discounts in the valuation of his business interest.
Appellate Court Rules on the Value of the Marital Business as to Personal Goodwill, Minority, Liquidity, and Marketability Discounts
The primary issue in this appeal was the value of Surgical Imaging Specialists Inc. (SIS), a subchapter S corporation that the parties formed in 2002. Stephan Fair, the husband, was the sole registered shareholder of SIS. Darlene Fair, the wife, was listed on all tax returns as an equal owner. The trial court awarded all community property interest to the husband and eliminated 25% of SIS’ goodwill as personal goodwill. On appeal, the husband contended that the trial court undervalued the personal goodwill discount and failed to apply a discount for lack of marketability. The husband also appealed the separate property award of an IRA account and a reimbursement to the wife for additional salary payments made by SIS to the husband. The court of appeal affirmed the trial court value of SIS, remanded the issue of IRA gains, and affirmed the reimbursement for additional salary payments.
Fair Value Determined Without Minority Discount
The Rhode Island Superior Court determined that the discounts for minority interest and lack of marketability should not be applied to the value of stock in a retail liquor store even though the minority shareholders brought the action for corporate dissolution.
Tax Court Rejects IRS’ Value Analysis, Finding It Assumes Additional Actions Not ‘Reasonably Probable’
In gift tax dispute, Tax Court rejects IRS expert’s valuation of noncontrolling, nonmarketable interests in two LLCs; expert proposed valuation theory and method were intended to lower opposing experts’ minority and marketability discounts but lacked support in facts, case law, or among peers.
Saltzman v. Commissioner
The pertinent discount issue in this case was the size of the marketability discount to apply to the fair market value of the stock in a family trust at the time of recapitalization.
DLOM Applies in This Merry-Go-Round Case
The appropriateness of a marketability discount was one of the issues in this appeal of a marital dissolution judgment.
Estate of Auker v. Commissioner
In this estate tax matter, the assets consisted of interests in several family-owned entities, the assets of which included real estate and interests in some of the family-owned entities that owned real estate.
Marketability discount appropriate for 100% interest valuation
The issue in this marriage dissolution case is whether a marketability discount should be applied in determining the value of the common stock of the family business. Husband owned all of ...
Discounts Not Applicable in Georgia Fair Value Determination
Minority shareholder J. Dan Blitch III owned 763.5 shares of The Peoples Bank (Bank), which composed 5.5% of the outstanding stock of the corporation.
Marketability Discount Applies Only to Goodwill
The New York Supreme Court, Appellate Division, Second Department affirmed the lower court’s decision not to apply a lack of marketability discount to the value of a real property holding company. Relying on established case law, the court noted that a la ...
Marketability discount without evidence of basis reversed
The Minnesota Court of Appeals remanded the valuation portion of the district court's decision in this marital dissolution case.
Money v. Money
852 P.2d 1158 (Alaska May 21, 1993). Judge Burke.
In re The Minnelusa Co.
At issue was the value of shares in a closely held business of a Chapter 11 debtor.