Ownership transition in the middle market
There are an estimated 200,000 middle-market businesses in the U.S., which represent about one-third of private-sector GDP and close to 50 million jobs, according to the National Center for the Middle Market.
Adewopo v. Jaja
In this divorce matter, the Indiana appellate court included enterprise goodwill of the wife’s business in the marital estate. The court-appointed, at the husband’s request, expert testified as to his conclusion of value using an income approach and calculating the amount of enterprise goodwill while excluding personal goodwill. The wife objected to the expert’s value but provided no evidence of her own determination of value.
Indiana Appellate Court Includes Enterprise Goodwill of Wife’s Businesses in Marital Estate
In this divorce matter, the Indiana appellate court included enterprise goodwill of the wife’s business in the marital estate. The court-appointed, at the husband’s request, expert testified as to his conclusion of value using an income approach and calculating the amount of enterprise goodwill while excluding personal goodwill. The wife objected to the expert’s value but provided no evidence of her own determination of value.
Dates set for AAML/BVR National Divorce Conference
If you do any valuation work for divorce, you do not want to miss the National Divorce Conference, brought to you by the American Academy of Matrimonial Lawyers (AAML) and Business Valuation Resources (BVR).
Prince estate and IRS settle valuation dispute
The IRS and Comerica Bank and Trust, the administrator of the estate of rock star Prince, have agreed to settle their dispute and agree on an estate value of $156.4 million, according to settlement documents submitted in the case.
Asare v. Asare
In this marital dissolution appellate case, the appellate court must resolve a number of issues related to the equitable distribution of the marital estate. On most issues, the appellate court affirmed the trial court. However, the appellate court reversed the trial court on the issue of how much passive appreciation related to an investment account was includable in the marital estate.
North Carolina Appellate Court Reverses Trial Court on Amount of Passive Appreciation in an Investment Account
In this marital dissolution appellate case, the appellate court must resolve a number of issues related to the equitable distribution of the marital estate. On most issues, the appellate court affirmed the trial court. However, the appellate court reversed the trial court on the issue of how much passive appreciation related to an investment account was includable in the marital estate.
Items of Interest Gleaned From the ASA Conference Networking Ops
BV firm staffing troubles, Shannon Pratt’s video remarks about his new book, a new app for fractional interests, a heightened interest in businesses with a real estate component, and help needed in developing a new module for the Cost of Capital Navigator are just some of the things we learned outside the regular sessions at the ASA conference—in and around the exhibit hall and during the many networking breaks.
BV News and Trends December 2021
A monthly roundup of key developments of interest to business valuation experts.
ShopRite, Inc. v. Gardiner
In determining the fair value of a minority interest in stock sold back to the companies in a shareholder oppression assertion, the Louisiana Court of Appeals rejected a discount for trapped-in capital gains tax since the companies had no intention of selling the properties owned. The appeals court also disallowed a reduction in fair value related to the value of affiliated accounts receivable, noting that there was no evidence that the receivables were uncollectible.
Louisiana Court of Appeals Disallows a Discount for Trapped-In Capital Gains Taxes and a Reduction in Receivables for Collectability
In determining the fair value of a minority interest in stock sold back to the companies in a shareholder oppression assertion, the Louisiana Court of Appeals rejected a discount for trapped-in capital gains tax since the companies had no intention of selling the properties owned. The appeals court also disallowed a reduction in fair value related to the value of affiliated accounts receivable, noting that there was no evidence that the receivables were uncollectible.
New toolkit in development for active/passive appreciation
During a BVR webinar, Ashok Abbott (West Virginia University) discussed his recent peer-reviewed paper that explains his methodology for separating active from passive appreciation of business assets in a divorce context.
The Nelson Tax Court case ‘has it all’
An appellate court recently affirmed the Nelson Tax Court case, which “has it all” in terms of valuation issues, said Barry Sziklay (Friedman LLP) in his session at the New Jersey CPA Society’s Business Valuation and Litigation Services Conference.
BV News and Trends November 2021
A monthly roundup of key developments of interest to business valuation experts.
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 ...
Appellate court KOs unaccrued interest on dissipated assets
In a divorce case, an appellate court vacated the order of the trial court that erroneously charged the husband with over $4 million in unaccrued interest on marital assets that the husband fraudulently dissipated from the marital estate.
IRS sending agents to NACVA’s BV training
The IRS is sending 79 agents to business valuation training provided by the National Association of Certified Valuators and Analysts (NACVA), according to former IRS manager Michael Gregory (Michael Gregory Consulting LLC).
Nelson v Commr.
Taxpayer appealed a Tax Court ruling that she gifted a percentage of partnership interests and not a fixed amount of value. As a result, when the IRS determined the FMV of those interests, the Taxpayer was left with a gift tax deficiency.
Court of Appeals Upholds Tax Court—Taxpayer Gifted a Percentage of Partnership Interests, Not a Fixed Amount
Taxpayer appealed a Tax Court ruling that she gifted a percentage of partnership interests and not a fixed amount of value. As a result, when the IRS determined the FMV of those interests, the Taxpayer was left with a gift tax deficiency.
BV News and Trends October 2021
A monthly roundup of key developments of interest to business valuation experts.
Gift and Estate Tax Valuation Update
Join Barry Sziklay for important 2021 income and transfer tax valuation cases as well as the valuation aspects of the adequate disclosure regulations required to report a gift for federal transfer tax purposes and start the statute of limitations running. Internal Revenue Code (IRC) Chapter 14 valuations, Special Valuation Rules §§ 2701-2704, will be addressed in a summary fashion given the complexities of the rules required for a valuation to meet the requirements of Chapter ...
Feedback wanted on Abbott model for active/passive appreciation
For several years, Professor Ashok Abbott (West Virginia University) has been developing a methodology for separating active from passive appreciation of business assets in a divorce context (see our first coverage here).
Record attendance at VSCPA conference
Again this year, BVR was pleased to sponsor the two-day Virginia Society of CPAs Forensic and Valuation Services Virtual Conference, which saw record attendance, reports Harold Martin (Keiter), who served as chair of the conference planning task force.
Insiders Examine Michael Jackson Estate Valuation Dispute
Testifying experts for the estate give their main takeaways from this fierce dispute with the IRS.
New online tool for valuing fractional interests
This October will see the launch of the Partner Value Expert (PVX), an online application that represents a new approach to valuing fractional interests involving real estate.