Category Archives: IRS Regulation

For family limited partnerships (FLPs) and other family-controlled entities, the viability is uncertain. To curb what the IRS considers abusive estate planning practices involving these entities, in August 2016, the IRS proposed changes to the tax code. However, the proposal has been widely criticized for being too broad and general by business owners, practitioners and…  Continue Reading »

Often, the list of documents appraisers use to value a business include the last three to five years of financial statements. Historical trends may be used to help forecast future performance, but historical results are only relevant to the extent that similar results are expected in the coming years. How do business valuation professionals handle…  Continue Reading »

Is it difficult to sell a business interest in Texas as well as other states? Public stocks can be converted to cash in three days, but it often takes a year or longer to sell a private business. Minority interests in private companies can be even harder to liquidate, because they may be subject to…  Continue Reading »

Revenue Ruling 59-60  The IRS originally created the landmark publication, Revenue Ruling 59-60, to outline the methods, approach, and factors to consider when valuing a closely held business for estate tax and gift purposes. Although it’s been around for nearly 60 years, today it’s often referenced in valuations prepared for other reasons, including divorce cases…  Continue Reading »

Summary: Richard Claywell was recently asked to review a business valuation report when a company was sold for $91 million. The appraisal report shows sales of $116 million, profit margin of $28 million, an “approximate” multiple of 3.25 and a value of $91 million. The appraiser assigned 80% of the sales price to personal goodwill.…  Continue Reading »