Yes! Business valuations are a must for estate and gift tax purposes. Estate valuation principles relating to business interests are in Regs. 20-2031-2 (f) and 20-2031-3. Gift tax valuation principles relating to gifts
Author Archives: JVFS
How Can One Business Have More Than One Value?
Many business owners (and others) are surprised to discover that a business can have more than one value! Value is defined differently in different legal contexts. It is not uncommon for the value of a business under one definition of value to be considerably more than it is
What Is Business Goodwill?
The notion of goodwill has existed since mankind first entered into commercial activity. In ancient Egyptian bazaars, merchants knew the location closest to the city gates would providethe best opportunity to sell goods.
Is There a Difference between Capitalization and Discounting of Benefits?
Capitalization and discounting of benefits are two methods of valuation related in that they are both parts on the income approach to valuation. However, one is more appropriate than the other under certain circumstances.
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.
Watch for “Double-Dipping” In Divorce Cases
Double-dipping is a phenomenon that happens in many divorce types of valuations. This typically happens when in the valuation, “normalizing adjustments” are made for salaries that have been drawn out of the company in order to reduce the profits for tax purposes.
What Are the Various Uses for Valuation?
Business valuations are critical for businesses of any size–and not just when a business is being bought or sold. Some common uses of valuations include:
Should Subsequent Events Be Considered in the Valuation?
Valuations are typically to be prepared based upon those facts that were known, knowable and foreseeable as of the date of valuation. However, there are numerous court cases that have considered subsequent or unforeseeable events.
How and Why to Get a Regular Business Valuation
Making it a point to get a regular, objective, and comprehensive valuation for your business is one of the most overlooked tasks of owning a business. Many business owners assume that they only need a valuation if they are planning on selling or retiring in the near future. But the reality is that the timeContinue reading “How and Why to Get a Regular Business Valuation”
Does Standard of Value Matter?
The standard of value sets the perspective of the buyer, of the seller, of the marketplace, and the specific property being valued. Without the proper understanding and application of the standard of value, the valuation
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