In this estate case, the valuation provided with the estate tax return was based on an assignee interest claiming discounts for lack of control and lack of marketability. The decedent formed a limited partnership in 2008 with the purpose to manage and preserve the assets. The assets of the limited partnership consisted of marketable equity …
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 …
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 …
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 …
What is the difference between a financial statement audit and a financial due diligence (aka quality of earnings report)? In general terms, an audit report 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 economic …
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. You may start planning on gifting your business to someone else. Often times a small …
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 …
In my family divorce work, I sometimes encounter situations where one party in a divorce intentionally prepared a fraudulent 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 …
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 …
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 …