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IRC § 2036 - Transfers with retained life estate
*** CURRENT THROUGH P.L. 106-580, APPROVED 12/29/00 *** SUBTITLE B. ESTATE AND GIFT TAXES CHAPTER 11. ESTATE TAX SUBCHAPTER A. ESTATES OF CITIZENS OR RESIDENTS PART III. GROSS ESTATE IRC S ...
Technical Advice Memorandum 9725002
PRIVATE RULING 9725002 INTERNAL REVENUE SERVICE NATIONAL OFFICE TECHNICAL ADVICE MEMORANDUM "This document may not be used or cited as precedent. Section 6110(j)(3) of the Internal Revenue Code."
Technical Advice Memorandum 9719006
PRIVATE RULING 9719006 INTERNAL REVENUE SERVICE NATIONAL OFFICE TECHNICAL ADVICE MEMORANDUM "This document may not be used or cited as precedent. Section 6110(j)(3) of the ...
Technical Advice Memorandum 9736004
PRIVATE RULING 9736004 INTERNAL REVENUE SERVICE NATIONAL OFFICE TECHNICAL ADVICE MEMORANDUM "This document may not be used or cited as precedent. Section 6110(j)(3) of the ...
Editor attempts to make sense of S versus C corporation debate
A recent rather widely publicized empirical study by a pair of academics concluded that the average S corporation sold for 12-17 % more than a comparable C corporation. 1 In con ...
The Hypothetical Willing Seller: Maybe C Corporations are Worth More Than S Corporations
Only a few members of the appraisal community believe that S corporations are worth more than C corporations; but, like members of the Flat Earth Society, they are loud and vocal in their convictions. This essay is not going to attempt to cover the entir ...
Embedded Capital Gains, One More Time: Estate of Jelke v. Commissioner
There were three valuation issues before the Court in Estate of Jelke v. Commissioner (T.C. Memo 2005-131, filed May 31, 2005 ). 1. What is the appropriate treatment of the embedded capital gains tax liability within Commercial Chemical Company ("CCC ...
An Overview of Personal Goodwill
In the world of FASB, goodwill is not delineated into personal goodwill and corporate or enterprise goodwill. However, in the tax world, this distinction can be of critical importance and can create significant savings to a taxpayer involved in the sale o ...
When is Fair Market Value Determined? Estate of Helen M. Noble v. Commissioner
Estate of Noble v. Commissioner was filed on January 6, 2005 .[i] In a 30 page decision, the Court gave short discussion to the reports of two experts, rather, focusing the decision on a discussion of a sale of the subject block some 14 months after the d ...
What is Fair Market Value? Simplot Reversed in Ninth Circuit Court of the U.S. Court of Appeals
In a split decision (2 for, and 1 dissenting), the United States Court of Appeals for the Ninth Circuit reversed a controversial decision of the Tax Court in Estate of Richard R. Simplot v. Commissioner (112 T.C. No. 13 (1999)). In the appellate court's o ...
Recent Cases Highlight Problem Areas in Buy-Sell Agreements
Permission to publish this guest article by John Stockdale, Jr., Editor, Business Valuation Resources is provided by Business Valuation Resources, Inc. www.bvresources.com. The best time to think about what happens if the business or the relationship bet ...
"Fair Value" is Redefined by the Mississippi Legislature
Mercer Capital has been involved in a number of FAIR VALUE cases since the early 1980s. We have provided independent opinions of fair value under the dissenting shareholder (or related corporate) statutes of at least ten states. In these litigations, we p ...
Experience and the Test of Reason
The Tax Court opinion regarding the Estate of Thompson vs. the Internal Revenue Service (T.C. Memo 2004-174) is remarkable in that the full opinion is essentially a business valuation analysis. The 54 page decision report includes approximately 18 pages o ...
Corporate Value Engineering: Is Your Business Ready for Sale?
Every business will sell - either partially or totally. And every business will sell either voluntarily, with the support of its owner(s), or involuntarily. At Mercer Capital we are often asked by potential clients, “Is my business ready for sale?” and ...
Second Fairness Opinions
Recent headline-grabbing corporate scandals have focused attention on the importance of independence for public accountants. In a transaction environment, corporate governance best practices emphasize not only the independence of auditors but also the f ...
IRS Code Section 409A and Valuation
Under IRS Code Section 409A, options granted by companies must be valued at their fair market values on the date of their granting. Prior to 409A, boards were able to establish option prices assuming they employed reasonable methods. Now, valuations can ...
Expected Holding Periods, Limited Partnership Pricing, and the QMDM
A recent article by Katherine Aschwald, CFA, ASA of Columbia Financial Advisers, Inc. ("CFAI") in SHANNON PRATT'S BUSINESS VALUATION UPDATE provided a study of restricted stock transactions that occurred subsequent to the change of the Rule 144 holding pe ...
The Integrated Theory of Business Valuation
The most recent issue of Valuation Strategies features an article on the Integrated Theory of Valuation.[1] This article is basically a summarized version of chapter three of our newest book entitled Valuing Enterprise and Shareholder Cash Flows: The Inte ...
Kaufman v. Commisioner, Part II: Back to School on Fair Market Value
In April 1999, the Tax Court issued a decision authored by Judge David Laro in KAUFMAN (ALICE FRIEDLANDER KAUFMAN v. COMMISSIONER, T.C. Memo. 1999-119, No. 17050-97 (April 6, 1999)). In that decision the appraiser for the taxpayer, Mr. Bret Tack, ASA, too ...
Rule 702, Daubert, Kuhmo Tire Co., and the Development of Marketability Discounts
The premise of this E-Law is simple: there is a trend towards using some type of quantitative approach when developing marketability discounts and you, as either users of appraisal reports or preparers of those reports, need to understand this. How will w ...
The Quanititative Maketability Discount Model Revisited
QUANTIFYING MARKETABILITY DISCOUNTS: DEVELOPING AND SUPPORTING MARKETABILITY DISCOUNTS IN THE APPRAISAL OF CLOSELY HELD BUSINESS INTERESTS was published in the fall of 1997. The book introduces the Quantitative Marketability Discount Model ("QMDM"), wh ...
Weinberg et al v. Commisioner - It's Not All About the Marketability Discount
On February 15th, the WEINBERG case was filed in US Tax Court. [Estate of Etta H. Weinberg, et al, v. Commissioner, T.C. Memo. 2000-51. Since we had just reported in this year's first E-LAW that we were unaware of any published opinions in which the QMDM ...
Restricted Stock Studies' Typical Results Do Not Provide "Benchmark" for Determining Marketability Discounts - But They Do Help
"Restricted Stock Discounts Decline As Result Of 1-Year Holding Period" reads the title of the lead article in the May 2000 issue of SHANNON PRATT'S BUSINESS VALUATION UPDATE. The subtitle reads: "Studies After 1990 'No Longer Relevant' For Lack Of Market ...
Court Dismisses S Corp Tax Argument in Fair Value Buyout
In statutory fair value proceeding, court adopts income-based approach reconciling key differences in expert analyses regarding historical earnings period, tax rates, and normalization for intercompany transactions; court rejects market analysis.
Whether to mark up assets; Whether to tax affect gains
My question is in relation to a divorce case in which the main marital asset is an operating retail business. The business is organized as an S corporation and it possesses appreciated real ...