Landmark Jones case featured in upcoming workshop
“Read the Jones case,” an IRS official said when asked about the position the IRS is taking on tax affecting pass-through entities.
BVU News and Trends February 2020
A monthly roundup of key developments of interest to business valuation experts.
Asset-based appraisal unsuitable for fair value determination, court says
In a bitter fight between siblings over the buyout of the minority shareholder’s interest in a successful construction business, the trial court found the asset-based valuation the majority shareholder’s expert proposed was fatally flawed for at least two reasons.
BVU News and Trends November 2019
A monthly roundup of key developments of interest to business valuation experts.
EY study examines TCJA impact on S corps
The Tax Cuts and Jobs Act (TCJA) succeeded in maintaining rough tax parity between large pass-through businesses and large C corps but only if the 20% qualified business income (QBI) deduction is in effect and only if it’s made permanent, according to an EY study commissioned by the S Corporation Association.
Linde v. Linde
Appellate court upholds trial court’s finding that majority shareholder breached fiduciary duty to minority shareholder and buyout order; trial court performed careful valuation analysis finding defense expert’s asset-based approach was “simply an improper method of valuation in the present case.”
Court Says Asset Approach ‘Is Simply an Improper Method’ in Present Appraisal Proceeding
Appellate court upholds trial court’s finding that majority shareholder breached fiduciary duty to minority shareholder and buyout order; trial court performed careful valuation analysis finding defense expert’s asset-based approach was “simply an improper method of valuation in the present case.”
IRS updates QBI deduction FAQs
Under the Tax Cuts and Jobs Act, Section 199A allows taxpayers to deduct up to 20% of qualified business income for tax years 2018 through 2025.
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.
Distinguishing Gross, Tax Court adopts tax-affected valuation of PTE
In an ingenious move, the U.S. Tax Court, ruling on an Oregon gift tax dispute, accepted the taxpayers’ tax-affected valuations of pass-through entities (PTE) without overturning Gross.
Estate of Aaron Jones v. Commissioner
In gift tax dispute, Tax Court adopts estate expert’s valuation of two related PTEs, including expert’s tax affecting; court distinguishes Gross and later cases; issue is not whether to tax affect but how; estate expert’s tax affecting was “more accurate than [IRS’] blunt zero-rate approach.”
Keeping Gross Alive, Nimble Tax Court Accepts PTE Tax Affecting
In gift tax dispute, Tax Court adopts estate expert’s valuation of two related PTEs, including expert’s tax affecting; court distinguishes Gross and later cases; issue is not whether to tax affect but how; estate expert’s tax affecting was “more accurate than [IRS’] blunt zero-rate approach.”
BVU News and Trends September 2019
A monthly roundup of key developments of interest to business valuation experts.
A special announcement on the 20th anniversary of Gross
On July 29, 1999, a landmark case rocked the business valuation world.
More than one valuation issue in Kress
Tax affecting is only one issue that makes the federal district court’s opinion in Kress a must-know for valuators, notwithstanding a recent reader comment that it’s doubtful the case would have received much attention had it not been for the tax-affecting angle.
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.
Reader comment on Kress case coverage
Responding to the attention the Kress case has received (at BVR and elsewhere), Harry Fuhrman, financial analyst with the Internal Revenue Service, gave us the following comments.
Kress appeal still a possibility
As the valuation community ponders the reach of the recent Kress decision, many eyes are trained on the government’s next move.
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).
Divorce conference speakers share valuation and legal practice tips
In “25 Hot Tips in 75 Minutes,” one of the most popular panels at the recent AAML/BVR National Divorce Conference in Las Vegas, attorneys and valuation experts shared tips on how to succeed in litigation as well as in managing client relations and workflow.
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.
Move to make permanent the QBI deduction gains steam
More than 100 business groups have come out in support of new legislation to make permanent the 20% qualified business income (QBI) deduction for pass-through entities (PTEs), according to a release from the S Corp Association.
BVU News and Trends April 2019
A monthly roundup of key developments of interest to business valuation experts.
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.