Should the Tax on Appreciated Property in the Corporation Be Considered in a Valuation?

Historically the IRS refused to allow any adjustment for “trapped-in taxes” on appreciated property in a closely held corporation. This position has changed based on recent court decisions.

However, there is still no agreement as to the magnitude or how these taxes would affect value. The decisions have allowed as little as 5% of the tax to as much as 100% of the tax and more recently allowed 100% of the tax present value based on the expectation of incurrence of the tax over time.

Call one of our credentialed professionals at (615) 822-8342 or contact us via email, to assist you in better understanding how “trapped-in taxes” can affect value or any other valuation or litigation needs.