Valuations Archive
Upside Down in 2011
When Superman was trapped in Bizarro World, he found everything was the opposite of its earthly counterpart. Or, as Jerry Seinfeld observed, for an inhabitant...
High Frequency Trading Firms
During the past 10 years, worldwide capital markets have undergone structural transformations that have fundamentally changed the manner in which exchanges,...
Appraisal Issues Surrounding the Leveraged Reverse Freeze
A freeze transaction is an estate-planning technique that uses the interplay of the differing financial and valuation characteristics of preferred equity...
Section 2036 Estate Controversies of Tenants in Common Interests
For estate tax purposes, Internal Revenue Code Section 2036(a) includes in a decedent's gross estate the value of certain property transferred during...
Should Substantial Discounts Apply to Very Short Holding Periods?
What factors impact marketability discounts in restricted stock transactions? Typically, an investor's expected holding period is the primary determinant...
Valuation Clauses
Since 2006, taxpayers have won three significant victories related to valuation clauses. Numerous articles have been written on McCord,1 Christiansen2...
The Waiting Game
Waiting for Godot is a classic play in which the protagonists await the arrival of a mysterious problem solver who never arrives. For estate planners...
Valuation Discounts in Tiered Investments
The subject of tiered discounts is a controversial one. Taxpayers may view the application of a tiered discount as a means to achieve a better tax result....
Valuing Limited Partnership Interests
Since the enactment of Internal Revenue Code Section 2703, the U.S. court system and the business valuation community have debated the meaning of that...
A Faulty Reading
In the case of Holman v. Commissioner,1 the U.S. Court of Appeals for the Eighth Circuit upheld a Tax Court decision2 that a discount for lack of marketability...
A Question of Value
The current economic climate and the financial upheaval of the last two years have many wealth owners taking a step back and re-evaluating the processes...
Take the LEAPS
When the time comes for your client to sell or gift shares of stock in a privately held company, how do you determine the value? Valuation experts use...
Pre-liquidity Planning
It has been 18 months since the collapse of Lehman Brothers and just over a year since the stock market touched its lows. Although the stock market has...
Excess Corporate Cash
Logic dictates that valuation experts assume that cash is worth its face value in majority interest or control scenarios. And that assumption makes sense:...
Discounts Under Siege
The year 2009 was less than two weeks old when Congressman Earl Pomeroy (D-N.D.) introduced a bill1 with the express purpose of legislatively prohibiting...
Valuations of Private Promissory Notes
Recent declines in the real estate and credit markets provide a unique opportunity in valuations of promissory notes. At first blush, the fair market...
The Holy Grail of a Valid DLOM
Business valuation analysts have been frustrated for years trying to arrive at a reasonable, plausible, defensible and supportable discount for lack of...
The Matched Pairs Approach
Perhaps nothing in business valuation is more controversial than the discount for lack of marketability (DLOM).1 This one adjustment can have a sizable...
Hedge Fund Discounts
Treasury Secretary Tim Geithner told Congress and the nation on Sept. 10, 2009, that the credit crisis was abating. But before the market fully recovers,...
Conservation Easements Primer
Recent changes in the law have enhanced conservation easements' effectiveness in estate planning. But increased scrutiny by the Internal Revenue Service...
Time to Gift Low
Wow! During 2008 we witnessed $4 a gallon gasoline, a mortgage industry meltdown, the Dow Jones Industrial Average fall from approximately 13,000 to 8,000,...
What Price Phelps' Gold?
Dear Fellow Tax and Valuation Geeks, Did you watch the swimmer Michael Phelps win eight gold medals during his historic performance in the 2008 Summer...
Custom Bond Valuations Can Save Clients Money
Barry A. Nelson, a Florida bar board certified tax attorney in the North Miami Beach, Fla., writes: Recently, I was approached by the personal representative...
CUSTOM BOND VALUATIONS DON'T (NECESSARILY) SAVE MONEY
The belief that estates can realize significant estate tax savings from custom bond valuations is based largely on the inefficiencies of the fixed income...
NEW VALUATION COMMITTEE
Trusts & Estates is pleased to announce the formation of a new editorial advisory board committee on valuations. We are honored to have these experts...
The Preferred Method
The battle began in earnest more than 40 years ago: How do we determine discounts for lack of marketability (DLOM)? In the 1970s, valuation experts applied...
Restricted Securities And Illiquidity Discounts
Tax cases offering guidance on the valuation of restricted securities are few and far between. The U.S. Court of Appeals for the Ninth Circuit in its...
At Last, a Valid Way To Value S Corps
The Delaware Chancery Court has developed a unique approach to an appraisal issue that has dogged estate and gift tax valuations of subchapter S corporations...
