In Memory of Tax Court Judge David Laro
BVR is very sad to note that the eminent David Laro, a senior judge of the United States Tax Court, passed away on September 21. Valuators in particular looked up to Judge Laro for his unique understanding of the field of valuation and the role it plays in many tax cases.
In memory of Tax Court Judge David Laro
BVR is very sad to note that the eminent David Laro, a senior judge of the United States Tax Court, passed away on September 21.
Can ESOP Appraisal Satisfy Charitable Contribution Reporting Requirement?
Court finds using ESOP appraisal to show “qualified appraisal” is a long shot to meet charitable contribution verification requirements because appraisal did not consider tax consequences or value shares individual petitioners donated, but petitioners may have reasonable cause defense.
Chrem v. Commissioner
Court finds using ESOP appraisal to show “qualified appraisal” is a long shot to meet charitable contribution verification requirements because appraisal did not consider tax consequences or value shares individual petitioners donated, but petitioners may have reasonable cause defense.
Medtronic, Inc. v. Commissioner (II)
8th Circuit says Tax Court failed to do the required comparability analysis between selected uncontrolled license arrangement and contested intercompany licenses, making it impossible to say whether CUT was the best method for calculating arm’s-length royalty rates in transfer pricing case.
How New QBI Deduction Impacts the Hypothetical Buyer and Seller, Part 2
Part 2 of a two-part article on the impact of the new tax law’s Qualified Business Income (QBI) deduction for pass-through entities in determining estimated after-tax cash flow at the investor level, as well as the related change in the fair market value of the entity.
Q&As on the Impact of the 2017 Tax Act on Business Valuation
Chris Mellen (Valuation Research Corp.) adds to the evolving discussion about the impacts of the new tax law on business valuation. Part of a series.
How the New QBI Deduction Impacts the Hypothetical Buyer and Seller
Part 1 of a two-part article on the impact of the new tax law’s Qualified Business Income (QBI) deduction for pass-through entities in determining estimated after-tax cash flow at the investor level, as well as the related change in the fair market value of the entity.
Valuing C Corps and Pass-Through Entities Under the New Tax Law
On December 22, 2017, President Donald J. Trump signed into law the Tax Cuts and Jobs Act of 2017 (the “Act”). The Act is the most comprehensive tax reform package since the Tax Reform Act of 1986. The Act contains sweeping changes to corporate and individual tax rates, deduction limitations, foreign income taxation, and the tax treatment of pass-through entities (PTEs) such as S corporations and limited liability companies. In this article, we will discuss ...
Valuing Bonus Depreciation Under the New Tax Law
The Tax Cuts and Jobs Act of 2017 (the Act) provides businesses the ability to deduct capital expenditures as “bonus depreciation” for purchases of qualified property. This article provides a framework for quantifying the value of bonus depreciation in the context of the discounted cash flow method.
2018 Tax Cuts and Jobs Act: Impact on Valuations of C Corps and Pass-Through Entities
The Tax Cuts and Jobs Act impacts the federal tax treatment of C corps, pass-through entities, and their respective ownership interests, and these changes will affect both the conduct of business valuation and the values of businesses and equity ownership interests. The Tax Cuts and Jobs Act contains temporary changes in the individual income tax rate structure, “bonus depreciation,” limitations on state and local tax (SALT) deductions, and “qualified business income” deductions for certain PTEs.
Appeals Court Upholds Insolvency Rulings in Transfer Liability Case
Appeals court upholds Tax Court’s transfer liability rulings; there was constructive fraud in that dividend payments to appellant were not compensation for services rendered but were part of a series of transfers leading to company’s insolvency.
Tax Court Introduces Formula to Value Donated Remainder Interest
Tax Court rules for IRS in disallowing deduction for charitable contribution involving remainder interest in leased property; requisite appraisal summary omits vital information, and court’s valuation formula shows donor made gross valuation misstatement.
Tax Court Favors IRS’s Cost Markup Analysis to Compute Management Fee
In a suit over fees paid by taxpayers’ operating companies to taxpayer-controlled management company, Tax Court says IRS expert’s cost markup analysis produces most credible arm’s-length management fee; this fee represents the allowable deduction amount.
Wycoff v. Commissioner
In a suit over fees paid by taxpayers’ operating companies to taxpayer-controlled management company, Tax Court says IRS expert’s cost markup analysis produces most credible arm’s-length management fee; this fee represents the allowable deduction amount.
Kardash v. Commissioner (III)
Appeals court upholds Tax Court’s transfer liability rulings; there was constructive fraud in that dividend payments to appellant were not compensation for services rendered but were part of a series of transfers leading to company’s insolvency.
Appeals Court Upholds Insolvency Rulings in Transfer Liability Case
Appeals court upholds Tax Court’s transfer liability rulings; there was constructive fraud in that dividend payments to appellant were not compensation for services rendered but were part of a series of transfers leading to company’s insolvency.
CUT Method Prevails in Amazon’s Transfer Pricing War With IRS
In transfer pricing case, Tax Court says Amazon more accurately determined buy-in and cost-sharing payments by using CUT method to value separately three types of intangible assets; IRS’s DCF analysis results in improper enterprise valuation, court says ...
Tax Court Introduces Formula to Value Donated Remainder Interest
Tax Court rules for IRS in disallowing deduction for charitable contribution involving remainder interest in leased property; requisite appraisal summary omits vital information, and court’s valuation formula shows donor made gross valuation misstatement.
RERI Holdings I, LLC v. Commissioner (RERI I)
Tax Court rules for IRS in disallowing deduction for charitable contribution involving remainder interest in leased property; requisite appraisal summary omits vital information, and court’s valuation formula shows donor made gross valuation misstatement.
Reasonable Compensation Analysis Ignores Objective Evidence, Tax Court Says
Tax Court dismisses taxpayer expert’s reasonable compensation analysis as not helpful to trier of fact; court points to failure to consider objective evidence and detects willingness to “validate and confirm” the amounts reported on taxpayer’s returns.
CUT Method Prevails in Amazon’s Transfer Pricing War With IRS
In transfer pricing case, Tax Court says Amazon more accurately determined buy-in and cost-sharing payments by using CUT method to value separately three types of intangible assets; IRS’s DCF analysis results in improper enterprise valuation, court says.
Amazon.com, Inc. v. Commissioner (I)
In transfer pricing case, Tax Court says Amazon more accurately determined buy-in and cost-sharing payments by using CUT method to value separately three types of intangible assets; IRS’s DCF analysis results in improper enterprise valuation, court says.
Compromised Asset Appraisals Undo Like-Kind Tax Plan
Tax Court says taxpayer’s transactions fail to meet Section 1031 requirements for income tax deferral; legal advisor’s ongoing interference with appraisal process compromised asset appraisals undergirding transactions to the point they became “useless.”
Compromised Section 1031 appraisal sinks Exelon tax strategy for fossil fuel power plant sale
U.S. Tax Court Judge David Laro frequently has cautioned experts not to give in to hiring attorneys who want to shape the appraisal. Although federal and state discovery rules offer some protection for attorney-expert communication, there is a risk of exposure and with it a risk of damage to the expert’s work product and reputation. A recent Section 1031 case, which Judge Laro handled, illustrates what happens when the communication is discovered.