Category Archives: Valuations

Putting ESOPs to Work for You and Your Employees

May 2, 2016 | Business Plans, Financial Planning, IRS Regulation, Tax Planning, Tax Preparation, Valuations

Employee stock ownership plans (ESOPs) provide tax-saving opportunities for business owners who want to exit the business and are committed to employee ownership. A business valuation is the first step to determining whether this option makes sense for you. How ESOPs Save Taxes Business owners typically qualify for the current maximum 20 percent maximum federal rate on  Continue Reading »

Surviving an Earnout Provision in a Business Sale

April 27, 2016 | Business Plans, Tax Planning, Valuations

An earnout provision is a contractual arrangement in which the seller receives additional payment in the future if certain financial goals are met, and if you are selling a business, the buyer may want to pay part of the price this way. Basically, part of the price is contingent on the performance of the company  Continue Reading »

Court KOs Ownership Percentage as Rationale for DLOC

April 22, 2016 | Court Rulings, Divorce Litigation, Valuations

Sieber v. Sieber, 2015 Ohio App. LEXIS 2256 (June 15, 2015) Size does not matter, especially when it comes to applying a discount for lack of control. A recent Ohio ruling examines the use of a DLOC where the owner spouse held a small interest in a business, but played a large role in running  Continue Reading »

Why is the Valuation Date so Important?

April 19, 2016 | Court Rulings, Divorce Litigation, Valuations

When considering how the value of an asset will be determined, it is common to contemplate which method the appraiser will use or whether the discounts might apply. However, one critical factor that may not immediately come to mind, is the appraisal date. What’s the Big Deal? One of the main reasons an appraisal’s “as-of”  Continue Reading »

Know When to Value Bequests

April 18, 2016 | Accounting Standards, IRS Regulation, Tax Planning, Tax Preparation, Valuations

Donations from a will may not actually get to your organization for some time because of probate and estate administration. That raises the issue of what value and what date to use in issuing the official tax receipt. When a will contains a gift in kind to be donated, the timing for when the organization actually receives  Continue Reading »

Adjusted Merger Price Superior to Other Valuation Methods

April 15, 2016 | Business Plans, Court Rulings, Valuations

LongPath Capital, LLC v. Ramtron International Corp., 2015 Del. Ch. LEXIS 177 (June 30, 2015) The Delaware Court of Chancery was a hive of activity during summer 2015. In two months, the court issued a number of key valuation decisions—all long and deep. The following statutory appraisal ruling falls in line with a suite of  Continue Reading »

Key Ruling on Loss of Beer Franchise Contracts

April 5, 2016 | Court Rulings, Valuations

Tri County Wholesale Distributors v. Labatt USA Operating Co. LLC, U.S. Dist. LEXIS 81914 (June 24, 2015) What is the best way to calculate the loss of well-known beer brands to a distributor whose franchise contract was lawfully terminated? This question, implicating Ohio’s Alcoholic Beverage Franchise Act, recently produced an important ruling on beer brand  Continue Reading »

Vexing Valuations

April 4, 2016 | IRS Regulation, Valuations

When determining fair market value (FMV), valuing donations other than cash or equivalents is rarely easy. Typically, FMV is the highest value that can be obtained for a gift in kind between a seller and a buyer who are acting independently from each other in an unrestricted market. For example, a work of art would  Continue Reading »

Chancery Validates Tax Affecting in Fair Value Case

March 22, 2016 | Court Rulings, Tax Planning, Valuations

Owen v. Cannon, 2015 Del. Ch. LEXIS 165 (June 17, 2015) A joint fiduciary duty and statutory appraisal suit provided an opportunity for the Delaware Court of Chancery’s new chief, Chancellor Bouchard, to rule on the issue of tax affecting. In discussing the choices that informed his discounted cash flow analysis, the chancellor explained in  Continue Reading »

One Option to Finance a Business Sale

March 8, 2016 | Business Plans, Debt & Financing, Financial Planning, Valuations

Because of their advantageous tax-free treatment, structured settlements are typically associated with the payment of personal injury damages. However, some business purchases and buyouts can also benefit from structured settlements using annuity payments from an insurance company. While payments from these non-personal injury cases are not tax-exempt, the recipient only owes taxes on the amount of  Continue Reading »