Considerations in valuing a non-compete agreement

A non-compete agreement is often implemented when a business is purchased to prevent the seller from competing with the purchaser. These agreements, referred to as Covenants Not to Compete, contain restrictions which often include a specified length of time and geographic area in which the seller is prohibited from competing with the purchaser. These agreements …

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Converting a C Corporation to an S Corporation: Potential Tax Implications

In recent years, the number of companies converting from C corporation status to S corporation status has increased dramatically. One of the main reasons is to avoid double taxation. C corporations are taxed at the corporate level for federal income tax purposes. Additionally, the C corporation shareholders are also taxed on any capital gains realized …

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Is it time to update your buy/sell agreement?

I am often asked to review the provisions in a buy/sell agreement related to the question as to how value is determined. This sometimes occurs when there is a triggering event. Unfortunately, in those circumstances, we simply determine value based on the agreement. Sometimes the resulting value is favorable to one party to the detriment …

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Save courtroom time, promote collaboration between CPA experts

When I have to testify regarding my opinion of value regarding the ownership interest in a business, I have found a particular strategy that speeds up my time on the witness stand. The strategy often helps settle not only business valuation differences between appraisers, but those relating to economic damages cases as well – before …

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In Federal Tax Court Your Report Is Your Testimony

The level of detail and the manner of explanation in a valuation report for tax compliance purposes is extremely important as the report serves as the expert’s direct testimony in Federal Tax Court. It’s interesting to observe the important steps that families take to protect their assets – hiring top wealth management teams, tax consultants, …

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What is the Name of a Company Worth?

Let’s assume there is a real estate brokerage firm located in the Phoenix metropolitan area that has been in business for the last 30 years and is organized as a regular corporation. The owner wishes to transfer the trade name from the corporation to his LLC and requests the assistance of a valuation firm. How …

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Getting Clarity in Buy-Sell Agreements

Any business with multiple owners should have a buy-sell agreement in place.  Buy-sell agreements are entered into between the co-owners of a business to direct what should happen when an owner leaves the company.  A typical agreement covers such issues as who can buy the ownership interest, what triggers a buyout, what price will be …

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Is Your Spouse Hiding Assets? A Review of Tax Returns May Uncover Some Red Flags

If you are in the process of divorce and believe your spouse may be hiding assets, a review of your tax returns may provide some indication of those assets.  Of course, the spouse who controls the preparation of the tax return does not always report income relating to hidden assets, (hence the word “hidden”).  However, …

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Testifying awareness – why CPA experts should be careful of what they write

CPAs who have been retained as testifying expert witnesses often prepare a written report, sometimes with accompanying exhibits, in support of their opinions to be expressed in the courtroom.  Experienced CPAs who do this sort of thing typically include a statement of their qualifications as a part of their reports.  This statement of qualifications, or …

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