On your mark, get ready,
sell
The biggest financial transaction in a private business owner’s
life is likely the sale of his or her business. Although many transfers are
premeditated, others result from unplanned events, which is why it’s essential
for owners to have an exit strategy. This article explains how valuators can
help entrepreneurs plan their exit strategies, whether sale is imminent,
unexpected or a long-term goal.
Taxpayer victory in the
battle over built-in capital gains tax
Built-in capital gains tax is an economic reality for C
corporations. Recent Tax Court rulings have forced the IRS to concede that
hypothetical investors consider imbedded tax liabilities when buying and
selling C corporations. This article discusses a recent case, Estate of Jelke v. Commissioner, which provides
an example of the ongoing debate as to whether valuators should apply
dollar-for-dollar or discounted reductions for built-in capital gains tax
liabilities.
Estate of Jelke v. Commissioner, U.S.
Court of Appeals for the 11th Circuit, No. 05-15549, Nov. 15, 2007.
Estate of Davis v. Commissioner, 110
T.C. 530, 1998.
Estate of Eisenberg v. Commissioner,
155 F.3d. 50, 57, 2d. Cir., 1998.
Estate of Jameson v. Commissioner,
267 F.3d. 50, 57, 2d Cir., 1998.
Estate of Dunn, 301 F.3d. 339, 5th
Cir., 2002.
Appraising appraisals
How to read a valuation
report
To understand an appraisal opinion, readers must wade through unfamiliar
financial jargon, subjective assumptions and pages of complex mathematical
computations. And comparing two widely divergent analyses to ascertain which
opinion is more reliable is even more challenging. This article highlights some
key elements that should appear in a comprehensive, reliable valuation report.
Valuators in the field
Site visits are an important part of the valuation process.
Not only do they enhance a valuator’s understanding of business operations, but
they also provide an opportunity to conduct face-to-face management interviews.
This brief article lists what valuators look for during site visits, including
asset and facility condition and whether there are any capacity issues.