Yet another tax reform proposal targets discounts for lack of marketability–at least for non-business assets
The latest tax reform proposal, which Rep. Jim McDermott (D-Wash.) introduced last month as the “Sensible Estate Tax Act of 2011,” would raise the maximum estate and gift tax rate to 55% and lower the applicable exclusion amount to $1 million. It would also eliminate valuation discounts on investment assets, such that: the value of any nonbusiness [...]
A banner year at Valuation Advisors–with great steps forward for their pre-IPO DLOM database
BVR just received an update from Valuation Advisors this morning that’s been posted online. That database now contains 8,690 pre-IPO transactions used to calculate a discount for lack of marketability. The database started 2011 with 4,917 transactions – so we’ve seen an increase of 3,773 transactions. In addition to the regular monthly updates Valuation Advisors [...]
Valuation Advisors’ DLOM database gets influx of international and domestic pre-IPO transactions
There’s been lots of news with the Valuation Advisors Discount for Lack of Marketability database recently—updates that sometimes get lost in all the other activity going on in the valuation profession. But, if you’re working on a report for a minority share position, you will want to be aware that: There have been 777 international [...]
Valuation Advisors adds foreign transactions
Exciting news from the Valuation Advisors Lack of Marketability Discount Study: We’ve just added 1,150 new deals to the database, including—for the first time—757 international transactions from 26 countries, with a median revenue of $44 million. China tops the list of new foreign transactions, followed by Israel, the United Kingdom and Canada. This most-trusted DLOM database now [...]
Lance Hall responds to IRS DLOM practice aid–free video available
The video of Lance Hall‘s presentation two weeks ago on the internal IRS practice guide on discounts for lack of marketability is now available as a free download and as a part of Business Valuation Resources’ Desktop Learning Center. It’s available here.
See for yourself: Hall plays hardball with the IRS
Last week, Lance Hall (FMV Opinions), responded to the recently released IRS DLOM Job Aid (which, by the way, the IRS retroactively made “official” by publishing it on itswebsite). In this 100-minute BVR webinar, Hall not only described how the Job Aid misconstrues the FMV Restricted Stock Study, he discussed the methods and continuing merits of the [...]
Will it still be called a “control premium?”
“One of the principles that’s been advanced to the Appraisal Foundation’s Third Working Group is that a control premium is more like a premium that may be observed between voting and otherwise comparable non-voting shares,” Dayton Nordin of Ernst & Young (and a member of the Working Group) told ASA attendees this morning in Chicago. [...]
ESOP put option argument for mitigating DLOM is ‘fallacious,’ says new article
“Virtually every ESOP appraisal that has been written in the past 10 years has concluded that, both in the case of purchases of company stock by an ESOP from direct shareholders and in the case of subsequent distributions and repurchases of company stock to and from plan participants, the discount for lack of marketability is [...]
Pre-IPO studies should be at the center of the DLOM debate
BVR’s programming on DLOM issues continues to spur debate about how to support marketability discount conclusions, but with a new restricted stock study on the market (Pluris), and more focus on probability-based models like OPM, poor old pre-IPO studies seems to be getting less attention. They shouldn’t be. For one thing, the IRS itself uses [...]
Is the IRS ‘overcritical’ of data sources in its DLOM Aid? (download it for free at bvresources.com)
Attorney and BV insider Paul Hood provides an executive summary of the IRS Discount for Lack of Marketability Job Aid on his recent blog, The Business Valuation Reviewer’s Handbook. “On the whole, the Job Aid is fairly well done,” Hood says, although it is not without its problems. For instance, “the Job Aid left out several other DLOM [...]
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