Demystifying Valuation, Economic Damages + Forensic Accounting

Grieve v Commissioner gift tax case update

There have been two recent tax case rulings revolving around valuations of entities for either estate or gift tax filing purposes that those involved in estate tax planning should be aware of. Here is the finding for the first case. Grieve v Commissioner What appears at first to be a straight-forward valuation of two entities …

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Will it ever be the same again?

The beginning to 2020 has been interesting so far. We went from the highest reported DOW Jones average in February, to a 30 percent drop in market value a month later.  But what does that mean for values of privately held companies? Don’t miss: Business valuation during a pandemic To answer that question, we must …

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Business valuation during a pandemic

One of the first things we must understand is the effect of the valuation date on a valuation. A valuation is performed as of a date in time. That date is often determined by the circumstances which have led to the need for a valuation. For instance, a valuation for estate tax filing is the …

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Quality of earnings report vs. an audit report

What is the difference between a financial statement audit and a financial due diligence (aka quality of earnings report)?  In general terms, a financial statement audit provides assurance to the public that a company’s financial statements are not materially misstated while a financial due diligence performs analytical procedures to gain a deeper understanding of the …

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Gifting as part of your succession plan

You have built your small business on your hard work and sweat. You may even have your son/daughter/niece/nephew or other family members working with you in the company. Now you are ready to move on, or at least slow down. Often times a small business owner thinks how natural and easy it would be to …

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Tax implications of stock vs. asset sale

As professional tax advisers we are often asked to comment on the tax implications our clients will face if their business is sold. From an income tax perspective, the buyer and seller are typically faced with structuring the deal as a stock sale versus an asset sale. These two strategies can result in significant tax …

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What if I never knew about my spouse’s fraudulent tax return?

In my family divorce work, I sometimes encounter situations where one party in a divorce intentionally prepared a  tax return with a significant amount of taxable income not reported. In these instances the fraud[1] was not known by the other spouse. The IRS allows the spouse (“innocent spouse” in this instance) who had no knowledge …

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Have you thought about your succession plan and the options you have?

No matter how long you avoid the succession planning discussion, you will exit the company one way or another. The worst-case scenario. The company ends up in probate court as a part of your estate. Best-case scenario. You contemplate all your options and decide what works best for you and your family so the next …

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Should a beneficiary blindly trust the trustee?

In a word – NO. But let’s look a little bit at the role of a trustee and the rights of a beneficiary. A trust is a legal agreement between two parties, a settlor (or grantor) and a trustee. Trusts are used to manage and protect the assets of the settlor. Trusts are used to …

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Buy-Sell agreement horror stories

When business entities are formed, they often execute agreements between the shareholders, partners or members that defines the price (or formula/methodology to determine the value) at which an owner is paid for his/her interest in the business in the event of death, disability, mental incapacity, divorce, bankruptcy, resignation or termination of employment and other triggering …

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