Most of my valuations are for estate and gift taxes, concern family-owned businesses, and involve gifts or sales to family members of 100%, control and / or minority interests.
Sometimes my clients’ motivations are simply to minimize their estates and the associated estate and gift taxes. This usually happens when the senior generation is well [...]
This post is most definitely a personal opinion that reflects my particular experience and clientele. I am interested in comments as to whether you agree or not with my thoughts!
Although I try as hard as I can to stay current with the technology of business appraisal – how we do things – I have [...]
The title is based on one of my favorite Far Side (RIP) cartoons depicting a guy rising from bed and looking at a wall poster with that as the text. I remember learning this the hard way when I was figuring out how to dress myself 55+ years ago.
How many times have you received [...]
I have had to consider prior transactions in a company’s securities in a large number of recent fair market value-based engagements. As you know, prior transactions, because they are highly visible, attract a great deal of IRS scrutiny and are also quite naturally of great interest to the parties to, for example, a minority [...]
Here are some examples of the sin of being overly precise:
1. A business owner wanted me to express the $5.2 dollar value of his firm as $5,205,156 (using my un-rounded weighted average value conclusion). There were 1 million shares outstanding; the difference in per share value was $5.200 versus $5.205 or less than 0.1%!
2. The highly [...]
In addition to my full-time appraisal practice, I recently took on a new assignment, serving as a part-time instructor at a local university, something I have always wanted to do. This semester I will teach introductory macroeconomics, a survey of the U.S. economy and how it works.
Luckily for me, the course has been taught [...]
If to err is human, boy, am I human! Perhaps you can learn from my most recent error!
I was valuing a business that was owed money by a shareholder. I was asked to assume that the loan receivable was uncollectible and valueless because the debtor was bankrupt. In my financial model, I [...]
The justification of purchase (“JOP”) test requires that the business, if purchased for the indicated amount:
1. Can pay the owner-manager reasonable (fair market) compensation.
2. Can adequately service assumed and acquisition debt.
3. Can earn a satisfactory return on investment. (This applies only to businesses that are not “buy-a-job” entities.)
A colleague called because his JOP test was not working [...]
