What’s the IRS up to now?
In its ongoing battle against family limited partnerships, the IRS
has a new strategy that targets three types of abusive practices: 1) excessive,
unsupported discounts, 2) administrative abuses, and 3) retained control under
Internal Revenue Code Sections 2036(a) and 2038. This article explains how
those aware of the new strategy can take steps to preserve discounts and
prevent penalties.
Recycle bottles, not
valuations
Valuations are valid only for a specific time and purpose. Despite
this, business owners sometimes mistakenly think they can save time and money
by recycling old valuations for new purposes. This article explains that the
unintended use of a valuator’s conclusion can diminish the report’s
credibility, leading to misinformed business decisions, fiduciary breaches and
embarrassing courtroom mishaps.
Estimating lost profits
for new businesses
Historic financial statements provide a logical starting point for
estimating lost profits. But how does an appraiser estimate lost profits for
startups or early-stage businesses without historic data? This article
discusses a recent case, Parlour Enterprises Inc. v. Kirin Group Inc., which
points out the need to consider such factors as the subject company’s economic
and financial data, market surveys and analyses, business records of similar
enterprises, and prelitigation financial projections to generate a
well-supported valuation conclusion.
Parlour Enterprises Inc. v. Kirin Group
Inc., 2007 Cal. App., G036525, April 4, 2007.
Business valuation
professional standards: An overview
Legitimate credentials and compliance with relevant
professional standards are the hallmarks of a qualified independent appraiser.
This brief article provides a summary of the four main business valuation
organizations’ professional standards and refers readers to the corresponding
Web sites for further information.