Valuing Marketable Securities Portfolios
Given the expected reduction in the estate tax exemption, the use of privately-held marketable equity securities (MES) portfolios as a wealth transfer vehicle is likely to increase. Join Gary Gerlach to learn the ins and outs of valuing these investment vehicles. We will cover the use of multiple (free) sources of closed-end mutual fund (CEF) data and discounts and analyze and select guideline CEFs, focusing on metrics such as asset type, concentration and allocation issues ...
Valuing Shareholder Cash Flows
The integrated theory of business valuation provides a conceptual framework for disciplined analysis of valuation questions. Too often, valuation analysts are tempted to view individual components of a valuation assignment on a piecemeal basis. Adhering to the integrated theory helps valuation analysts develop base valuation conclusions, discounts, and premiums that are rooted in a shared perspective of the subject company and the subject ownership interest. In the first webinar of the three-part series, Chris Mercer ...
Structure, Valuation & Tax Insights for Logistics & Trucking Companies
Join Jaclyn Burket Frank and Ricky Castillo for an engaging trip into the world of logistics and trucking businesses. Discover the different types of entity structure along with the advantages and disadvantages of each structure. Learn how the 2018 tax law impacted each entity structure and common deductible/nondeductible expenses for the logistics and trucking industry. The industry-specific adjustments to consider along with specific questions to ask business owners to determine whether economic, governmental, and location ...
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 ...
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.
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.
Matter of Digeser v. Flach
Income approach, capitalization rate, expert testimony, valuation methods, fair value, minority oppression, statutory appraisal, S corporation, C corporation, normalization, market-based approach, comparable transactions ...
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.
Absent Appearance by Appraiser, Valuation Report Is Hearsay
In an income tax case where the IRS challenges the calculation of net unrealized built-in gain that has been based on a contemporaneous valuation of the assets subject to built-in gain tax, the valuation report by itself constitutes inadmissible hearsay where the preparing appraiser is not available for cross-examination.
Van Der AA Investments, Inc. v. Commissioner
In an income tax case where the IRS challenges the calculation of net unrealized built-in gain that has been based on a contemporaneous valuation of the assets subject to built-in gain tax, the valuation report by itself constitutes inadmissible hearsay w ...
No DLOM Absent Extraordinary Circumstances; Bright-Line Rule Prohibiting Built-in Gains Discount Rejected
The issue, in this case of first impression in Washington, was the propriety of discounts for lack of marketability and built-in capital gains in a dissenters' rights proceeding.
Comparing three payout assumptions impact on values of S versus C corps
As the accompanying editorial suggests, whether S corporation interests are worth more than C corporation interests, at least at the minority interest level, depends on several factors. One important ...
Norton Co v. Smyth
The issue, in this case of first impression in Washington, was the propriety of discounts for lack of marketability and built-in capital gains in a dissenters' rights proceeding.
Bright-Line Rule Barring Discounts Is Inappropriate
The Washington Court of Appeals reversed a trial court’s bright-line rule prohibiting discounts for lack of marketability and built-in capital gains taxes when determining fair value in a dissenters’ rights action.
"Highly troubled" by Estate of Adams
I am highly troubled by several recent circumstances. You are familiar with Gross (BV Update has discussed it at length). It is clear to anyone with a modicum of financial background that ...
Greater sale proceed for S corps
The Impact of S Corporation Status on Fair Market Value , Brian H. Burke , Business Valuation Review , June 2001, pp. 15-24. A fact often missed in professional articles on the subject of S co ...
Impact of death-tax elimination on appraisers
The last couple of years have seen a continuing (and increasing) discussion about the elimination of the federal estate and gift tax, otherwise known as the death tax. Many businesses are at least p ...
S corps and the capital gains game
"Are S Corporations Entitled to Valuation Discounts for Embedded Capital Gains?" James J. Reto, Valuation Strategies , January/February 2000, pp. 6-9, 48. Courts have recognized the tax consequence ...
Reflections on Valuing S Corporations
Sliwoski, Leonard, "Reflections on Valuing S Corporations ," Business Valuation Review , December 1998, pp. 141-145. According to Sliwoski, there are two options for valuation professionals to con ...
ASA summer '98 conference coverage (continued from August issue)
Highlights from the ASA's summer 1998 conference.