Marshall v. Marshall (I)
Appeals court says parties’ agreement is ambiguous as to whether distributions related to husband’s ownership in S corp. are includable in alimony and child support calculation; on remand, trial court must determine what income parties meant when specifying use of pretax income from employment.
Courts Agree Reasonable Compensation Is Sound Method for Calculating Spousal Support in S Corp Context
Appeals court says parties’ agreement is ambiguous as to whether distributions related to husband’s ownership in S corp. are includable in alimony and child support calculation; on remand, trial court must determine what income parties meant when specifying use of pretax income from employment.
Appeals Court Tiptoes Around Tax Affecting in Divorce Setting
Appeals court agrees that in valuing husband’s S corp for marital distribution “national case law” (Kessler, Bernier) supports his expert’s tax affecting but says it must defer to trial court’s decision to adopt competing expert’s position not to tax affe ...
Hamelink v. Hamelink
Appeals court agrees that in valuing husband’s S corp for marital distribution “national case law” (Kessler, Bernier) supports his expert’s tax affecting but says it must defer to trial court’s decision to adopt competing expert’s position not to tax affe ...
Gentile v. Gentile
Appellate court affirms lower court’s Fair Market Value (FMV) determination of husband’s S corp. medical practice, which incorporates goodwill value the wife’s expert calculated based on the Goodwill Registry.
Bernier v. Bernier (II)
Massachusetts Court of Appeals remands the case—for the second time—to the trial court for an appropriate valuation of the parties’ S corporations, including a tax affecting according to the “Kessler metric” (adopted from the Delaware Chancery Court).
In re Marriage of Rodenback
Appellate court disavows day-of-trial valuation by expert that used the husband’s “off the cuff” forecasts, preferring value based on historical earnings, without consideration of the tax burden the husband would have to bear in making the equalization pa ...
Tax Court Rejects Tax Affecting, CSRP, Poor Comps, and More
Tax Court dismisses guideline company comparable method in this case for lack of true comparables and rejects experts’ DCF for tax affecting and other adjustments without sufficient justification or support.
Second Post-Bernier Court Says Income Approach May Be Preferred, But Not Exclusive
Massachusetts court precludes discounts in valuing marital business in divorce, and says that while income approach is preferred, net asset value may be appropriate in the absence of determinable market value.
Gallagher v. Commissioner (I)
Tax Court dismisses guideline company comparable method in this case for lack of true comparables, and rejects experts’ DCF for tax affecting and other adjustments without sufficient justification or support.
Dawyot v. Catawba Capital Mgmt., Inc.
In buyout dispute, court sets aside third-party appraisal performed pursuant to redemption agreement; court says final appraisal report contains at least one “palpable error” related to normalization of earnings that had a significant effect on the valuation; appraiser did not testify at trial.
Palmerino v. Palmerino
Massachusetts court precludes discounts in valuing marital business in divorce, and says that while income approach is preferred, net asset value may be appropriate in the absence of determinable market value.
Adams v. Adams
Massachusetts Supreme Judicial Court rejects direct capitalization method for valuing hedge fund partnership interest, finding DCF method is more appropriate, plus tax-affecting.
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In re Marriage of Williams
Montana high court rejects 35% minority discount to husband’s half interest in a closely held, family business, which he owned with his father and had equal say over operations, management, and application of funds.
‘Dueling Over Discounts’ in Divorce of Minority Shareholder
Court considers the applicability of discounts to a minority shareholder’s interest in an S Corp, and whether the company’s retained earnings may be properly attributable to a minority owner for child support determinations.
Wright v. Wright
Court considers the applicability of discounts to a minority shareholder’s interest in an S corp, and whether the company’s retained earnings may be properly attributable to a minority owner for child support determinations.
Bernier v. Bernier (I)
Massachusetts Supreme Court applies tax affecting analysis to valuation of subchapter S corporations in divorce.
Tax Court Declines to Tax Affect S Corp in Gift Transfer Case
In a post-Gross decision, the Tax Court considers tax affecting S corp earnings and also discounts for lack of marketability and control.
Dallas v. Commissioner
In a post-Gross decision, the Tax Court considers tax-affecting S Corp earnings and also discounts for lack of marketability and control.
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 ...