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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Calculations vs. Appraisal Opinion in Business Valuation for Marital Dissolutions

There has been much discussion in the valuation community regarding whether a calculation engagement (i.e., a calculation of value of a business) can be used in a marital dissolution in Arizona (and other jurisdictions) and whether a “calculation report” is appropriate in that context. Currently there is little guidance on this matter in Arizona. Should …

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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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Determination of Income for Child Support: Consider Income Control When A Parent Holds an Interest in a Closely Held Business

When a parent has income generated from an ownership interest in a closely held corporation or partnership, it is important to determine how the earnings of the entity flow through to the parent.   Both Subchapter S-Corporations and Partnerships are pass-through entities.   The income or loss from operations flows through to the parent’s individual return based …

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Testifying awareness – black hats in the courtroom

When I was a young boy watching western movies, you could always tell who the good and bad guys were.  It was easy.  The good guys always wore white hats and the bad guys always wore black hats – well, most of the time anyway.  The black hat guys were just plain mean and ornery …

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Understating Income on Your Tax Return – Are You an Innocent Spouse?

When we are providing consulting services relating to a divorce, we are often asked to perform a business valuation and/or make a determination of income of one or both of the spouses for support purposes.   During the course of our work we will review and utilize the joint income tax returns of the parties.  It …

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The Role of the Expert Witness: Advocacy vs. Objectivity

Being a business valuator/expert witness often places the practitioner in the precarious position of deciding whether to be an advocate for their client’s position or an objective professional whose job it may be to not necessarily please the client. After many years of practice, it is very difficult for the practitioner to separate his or her …

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Reducing Client Costs in Civil Litigation

Prohibitive costs and excessive delays risk failure of the civil justice system to provide parties with a speedy, inexpensive and just determination in civil actions, goals set forth in Rule One of the Federal Rules of Civil Procedure and most state rules. The Forensic and Valuation Services (FVS) Executive Committee of the American Institute of …

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Arizona Law Changes Regarding Prejudgment Interest

When we perform calculations of economic damages for litigation purposes, there is often a component of past business loss or other type of historical economic loss.  Most experts will bring those historical losses to present value terms, using a prejudgment rate of return to make the injured party whole for past damages.  Although there are …

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