2019 Discount for Lack of Marketability Study
July 2019 PDF
Bruce A. Johnson, James R. Park
Johnson/Park
Business Valuation Update Yearbook, 2019 Edition
February 2019 PDF
BVR (editor)
Business Valuation Resources, LLC
‘Benchmark average’ approach dominates for DLOM
The use of restricted stock studies is the most cited methodology for quantifying a discount for lack of marketability (DLOM), according to the results of our DLOM survey.
How valuation experts estimate DLOM
Restricted stock studies and pre-IPO studies remain the most cited methodologies for quantifying a discount for lack of marketability (DLOM), according to the results of our DLOM survey.
Reminder: Take our DLOM survey
Our thanks to those who have responded so far to our survey designed to narrow down the methods most frequently used for determining a discount for lack of marketability (DLOM).
Find out what DLOM methods are used the most
By our count, there are almost 75 methods for estimating a discount for lack of marketability (DLOM), and more are in the works.
Update to ‘Stout Restricted Stock Study Companion Guide’
The most widely used restricted stock transaction database for providing empirical support for a discount for lack of marketability (DLOM) is the Stout Restricted Stock Study (formerly FMV Opinions).
This Short Paragraph Can Bolster the DLOM Section in Your Next Report
Are you using a simple “benchmark average approach” for your analysis of a discount for lack of marketability (DLOM)? That type of analysis may have passed muster years ago, but times have changed.
Tenn. Appeals Court says DLOM in divorce appropriate under facts of case
A recent Tennessee appeals court decision found that the trial court presiding over a drawn-out divorce had discretion to apply a marketability discount when it valued the owner-spouse’s interest in two companies in 2016.
Stout updates Restricted Stock Study and Calculator
The most widely used restricted stock transaction database is the Stout Restricted Stock Study™ (formerly FMV Opinions), which is updated quarterly and contains 780-plus screened transactions with up to 60 data fields.
DLOMs and the IRS: Five tips on how to to deal with a business valuation IRS audit
A new e-book on DLOMs and the IRS that offers five straightforward tips from former IRS territory manager Michael Gregory to reduce the chance of IRS audits on your business valuations in the future.
Business Valuation Update Yearbook, 2018 Edition
February 2018 PDF
BVR (editor)
Business Valuation Resources, LLC
What You Need to Know About DLOMs and the IRS
With fresh insight from developing his recent book, Business Valuations and the IRS, Mike Gregory provides you with the highlights of what you need to know about discounts for lack of marketability (DLOM ) when providing a business valuation report for federal tax purposes. The DLOM is one of the most common adjustments by IRS valuers, so you need to know how to minimize the potential of your business valuation report being audited on this ...
DLOM: Building, Supporting, and Reconciling Multiple Models
There are 75 methods to determine a DLOM. Navigate through the maze of methods with experts Jim Alerding and Josh Angel as they point out the primary methods that you need to master. With a fresh understanding after researching and co-writing the Discount for Lack of Marketability Guide and Toolkits, our experts show you how to determine a DLOM from those methods, and, more importantly, they help you build the knowledge on how to support ...
Discount for Lack of Marketability Guide and Toolkit
May 2017 PDF
James Hitchner, Jim Alerding, Josh Angell, Kate Morris
Valuation Products & Services
Act now to KO controversial Section 2704 regs
Comments are due by Aug. 7, 2017 on an IRS notice that puts the proposed Section 2704 regs on the chopping block.
New Tennessee law streamlines DLOM use in divorce valuation
When and whether to apply a discount for marketability in divorce valuations has been an open question in Tennessee, owing to some confusing court rulings. However, a recent amendment to the Tennessee Code seeks to provide clarity to valuators handling divorce cases in this jurisdiction.
Tax Court's Koons decision withstands appeal: DLOM ruling anchors valuation
The 11th Circuit recently affirmed a four-year-old Tax Court valuation of a revocable trust’s interest in a limited partnership. The linchpin in the valuation was the marketability discount.
New Jersey court applies DLOM in forced buyout: Defendant’s conduct created ‘extraordinary circumstance’
In adjudicating a New Jersey family dispute that escalated into an oppressed shareholder action, the trial court recently found the oppressing shareholder had created a situation that mandated the application of a discount for marketability (DLOM) in order to achieve a “fair and equitable” outcome.
Business Valuation Update Yearbook, 2017 Edition
February 2017 PDF (349 pages)
BVR (editor)
Business Valuation Resources, LLC
Latest methodology and practices for DLOM examined
A blue-ribbon panel of experts review the primary DLOM methods and reveal new survey data on which methods valuators rely on most.
What DLOM methods are now used the most?
Is there a consensus yet on the method to use for estimating a discount for lack of marketability (DLOM)? Find out by taking a short survey.
IRS inundated with comments on proposed IRC 2704 regs
Over the past week, over 100 new comments have been submitted to the IRS about the controversial proposed Section 2704 regs designed to rein in estate tax valuations. That brings the total comments to almost 200, but it's hoped that many more will come in before the due date of November 2.
Appraisers see spike in engagements due to proposed Section 2704 regs
At the ASA Advanced Business Valuation Conference last week in Boca Raton, Fla., valuation practitioners told us that they are seeing an increase in valuation engagements triggered by the proposed Section 2704 regulations. They expect the increased business to gain steam as the regs continue to sink in with attorneys, wealth planners, and clients.
Challenge to new Section 2704 regulations is shaping up
The accounting, valuation, and legal professions are hard at work to defeat the Treasury Department's proposed Section 274 regulations. The new regs would curtail, if not entirely eliminate, valuation discounts in family-controlled entities.