Valuation

Are Court Awards and Settlement Proceeds Taxable?

Louis J. Cercone, CPA, CFE, CFF, ABV, ASA, CVA

When you receive an out-of-court settlement or court-ordered award, you might not know how to classify it for federal income tax purposes. Don't assume it will be tax-free without discussing matters with a tax professional. The rules are complex and taxpayers bear the burden of proving that an amount should be excluded from gross income.

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Shareholder Buyouts: Comprehensive Agreements Are Essential

Louis J. Cercone, CPA, CFE, CFF, ABV, ASA, CVA

How much will a departing shareholder receive when he or she leaves the company? The answer often depends on the details of the shareholders' agreement. But some buyout provisions are clearer than others. Ambiguity in a subcontractor's agreement led to a recent legal battle that left interpretation of the buyout provision to the discretion of the Pennsylvania courts.

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Comprehensive Business Valuation Reports Cover All the Bases

William P. Allen, CPA/ABV, CFE

In a recent shareholder buyout case, a business valuation expert went to bat but struck out. Why? His written report was unclear about whether an independent reasonable compensation analysis had been conducted, and whether valuation discounts for lack of control and marketability had been applied. Consequently, the court rejected his conclusion.

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How the New Tax Law Will Affect Business Valuations

William P. Allen, CPA/ABV, CFE

The Tax Cuts and Jobs Act is expected to have far-reaching effects that will vary significantly from company to company. In general, the new law lowers business tax rates. But it also reduces or eliminates various business tax breaks, while expanding others, either permanently or temporarily. Here's a brief summary of the changes and how they affect the process of valuing a private business interest.

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Court Issues Failed IPO Price to Value Minority Interest

Douglas P. Sosnowski, CPA/ABV, ASA, CFF

Courts prefer objective valuation evidence over subjective assumptions and predictions. But, when valuing a startup business with unproven intangible assets in a volatile market, objective data can be hard to find. Here's how the courts in Arizona found a way to handle a recent shareholder dispute that involved widely divergent expert opinions.

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IRS Withdraws Proposal to Curb the Use of FLPs

Louis J. Cercone, Jr., CPA, CFE, CFF, ABV, ASA, CVA

The Treasury Department finally abandoned its controversial proposed regulations on liquidation restrictions for gift, estate, and generation-skipping transfer taxes. This is a major victory for family businesses. Here's why the proposal was withdrawn and how estate planning might change under the GOP tax reform framework. This article also provides some best practices for the continued use of family limited partnerships and other family-controlled entities.

 

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