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Tax Court accepts tax affecting—grudgingly

In an important case litigated seven years ago, the Tax Court has issued a memo decision that accepts tax affecting—but noted that it did so because of the “unique setting at hand” in the case.

Power Panel: Live Expert Answers for Today’s Tough BV Questions

What is in store for 2021? While we don’t have a crystal ball, we do have the next best thing. Thought leaders Jay Fishman, Jeff Tarbell, Michelle Gallagher, and Ken Pia are on hand to answer your questions on what is changing, trends within the profession, and thought processes behind tackling tough problems. What’s more, if you send in a video of yourself asking the question, you will get free admission to the session. Use ...

Tax Court adopts tax-affected valuation of PTE without overturning Gross

For years, the appraisal community has wondered when the U.S. Tax Court will recognize the need for tax affecting when valuing pass-through entities (PTE) and how the court will square its decision with precedent, i.e., the Gross case in which the Tax Court rejected the taxpayer’s tax-affected valuation.

Letter to the Editor: Response to a Reader’s Comments Concerning the Kress Case

The Kress case has received a great deal of attention on a number of valuation fronts, most notably that both the taxpayer and the government tax affected the earnings of the subject S corp. This letter to the editor is a response to comments on the case made by an IRS analyst.

BVU News and Trends September 2019

A monthly roundup of key developments of interest to business valuation experts.

Willamette gives insights into estate and gift valuations

The Summer 2019 Insights from Willamette Management Associates focuses on valuations for estate and gift tax purposes and is edited by Weston C. Kirk.

A special announcement on the 20th anniversary of Gross

On July 29, 1999, a landmark case rocked the business valuation world.

Kress and S Corp Valuations: Be a Little Cautious

Details have emerged about the methodology the government’s valuation expert used in the Kress gift tax case. The case is important because both sides tax affected the earnings of the subject S corp, which is contrary to the position the IRS and the Tax Court have taken in the past.

Hope for clarity on S corp valuations

The recent Kress case indicates approval of S corp tax affecting, but the court was neutral on the issue of an S corp premium (see prior coverage).

Details emerge on Kress S corp valuation

The Kress gift tax case is brimming with valuation issues (see our prior coverage), but one aspect in particular has captured the valuation community’s attention.

Kress gift tax case signifies approval of tax affecting—at least in federal district court

One aspect that has valuators excited about the Kress v. United States gift tax case is that the federal court that ruled on the taxpayers’ challenge to the IRS’s gift tax assessment accepted valuations from both parties’ experts that applied a C corporation tax rate to value minority shares in an S corporation.

Questions surround reach of Kress S corp tax-affecting decision

One of the questions arising in the much-debated Kress gift tax case is how much precedent value the court’s decision has.

Testing the S Corp Value Premium for Realism and Reasonableness

Not long ago, we attended the author’s session at a NACVA conference where she presented on this topic. We asked her for this article, which has some key takeaways from that session as well as from a longer paper she wrote.

Valuing an S-corporation? Ten books and articles you absolutely should read

View a list of essential reading for business appraisers preparing to value an S corporation, from valuation expert and former IRS territory manager, Michael Gregory.

Internal IRS memo unearthed re: S corp valuations

During a webinar, Michael Gregory (Michael Gregory Consulting LLC) discussed an internal IRS memo he recently obtained via a Freedom of Information Act (FOIA) request that has implications for valuing noncontrolling interests in S corps.

How to Conduct an S Corp Valuation for the IRS Given IRS Internal Memorandums

Join Michael Gregory for a discussion on two recently obtained internal IRS memorandums so that you can work more effectively with the IRS on estate and gift tax valuations. These memorandums shed light on how the IRS approaches valuing S corporation valuations and what you need to consider when preparing an S corporation valuation for federal tax purposes. The memorandums recommend consideration of both Revenue Ruling 59-60 and the IRS Job Aid on Non-Controlling Interests.

Inside Pratt’s Stats: Impact of Entity Form on Selling Price (Part 2)

Based on the results of various statistical analyses of Pratt’s Stats transactional data, this article explains how transaction size and the entity form support the existence (and the magnitude) of the “pass-through entity premium.”

Major advance in thinking about S corp taxes and value

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