Discount for Lack of Marketability and the IRS

October 2013 Softcover

Michael Gregory

Birch Grove Publishing

Discount for Lack of Marketability and the IRS, authored by Michael Gregory, provides the single most authoritative and up-to-date introduction available on the topic of discounts for lack of marketability (DLOM) and the IRS. Gregory championed the DLOM Job Aid published by the IRS in August 2011 and this book assists readers in understanding DLOM and in evaluating and choosing the approach to DLOM that works best for them. It provides comments solicited from leading, current DLOM modelers on their models, recommendations about sources for current DLOM data, and reviews of relevant federal court cases. You will want to add this resource to your library.
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Table of Contents:

  • Preface
  • DISCOUNT FOR LACK OF MARKETABILITY: Job Aid Plus
    Advice for Practitioners - This Year and Beyond
  • Disclaimer and Acknowledgements
  • A. EXECUTIVE SUMMARY
  • B. INTRODUCTION
  • C. GENERAL MARKETABILITY DISCOUNT INFORMATION
    • 1. MARKETABILITY DEFINED
    • 2. FACTORS INFLUENCING MARKETABILITY IDENTIFIED
    • 3. WILLING SELLER CONSIDERATION
    • 4. MARKETABILITY OF MINORITY VS. CONTROLLING INTERESTS
    • 5. SAMPLE INITIALIDR ITEMS ON MARKETABILITY
  • D. SUMMARY OF APPROACHES TO DLOM
    • 1. BENCHMARK APPROACHES
      • (a) Restricted Stock Studies
        • i. FMV Opinions
        • ii. Pluris
      • (b) Pre-Initial Public Offering (Pre-IPO) Studies
      • (c) Restricted Stock Equivalent Analysis
      • (d) Cost of Flotation
      • (e) Mandelbaum Factors
    • 2 SECURITIES-BASED APPROACHES
      • (a) Long-Term Equity Anticipation Securities (LEAPS)
        Robert Trout , and Ronald Seaman
      • (b) The Longstaff Study
      • (c) The Chaffee Study
        (d) Bid-Ask Spread Method to Determine DLOM
    • 3. ANALYTICAL APPROACHES
      • (a) Karen Hopper Wruck
      • (b) Hertzel and Smith
      • (c) Bajaj, Denis, Ferris and Sarin
      • (d) Ashok B. Abbott
    • 4. OTHER APPROACHES
      • (a) QMDM (Christopher Mercer)
      • (b) NICE (William Frazier)
      • (c) NERA (David Tabak)
      • (d) Partnership Profiles (Partnership Spectrum)
      • (e) Public vs. Private P/E Ratios in Acquisitions (Mergerstat)
  • E. EVALUATION AND RECOMMENDATIONS
    • 1. APPROACHING MARKETABILITY DISCOUNT AS A REVIEWER
    • 2. APPROACH MARKETABILITY DISCOUNT AS A VALUATOR
    • 3. DEALING WITH MARKETABILITY DISCOUNT IN A REPORT REVIEW UNDER CERTAIN SPECIFIC SITUATIONS
      • (a) Use of Pre-IPO studies to support DLOM
      • (b) Use of simple average or median from Restricted Stock Studies
      • (c) Use of analytical study results without getting behind data
      • (d) Use of study results not supported by market data
      • (e) Reliance solely on court decisions
    • 4. SOURCES AVAILABLE TO IRS VALUATION ANALYSTS
  • F. SUMMARY AND CONCLUSIONS
  • Evaluation and Recommendations
  • Webinar Follow-up
  • Personal Recommendations
  • Practical Pointers
  • Endnotes (IRS Job Aid)
  • Endnotes (author commentary)
  • Books by Michael A. Gregory