New update and free download on valuing goodwill
Thanks to a subscriber inquiry, we’ve just updated our ever-popular free download Goodwill Hunting in Divorce to reflect the current state of the law in Tennessee regarding the determination of the goodwill value of a professional practice. According to this one-of-a-kind, state-specific summary, at least 28 jurisdictions now clearly follow the current majority rule, which holds [...]
California: first state to try to legislate against the ‘double dip’
Last February, California Senator Roderick Wright (D-Inglewood) sponsored a bill, SB 481, regarding the determination of spousal support in marital dissolution actions. “Existing law requires the court to consider various factors for determining spousal support, including, among other things, the ability of the supporting party to pay spousal support, and the obligations and assets of each [...]
McReath reminds appraisers of the importance of independence, says Billings
Craig K. Billings (Capital Valuation Group, Inc.), the primary valuation expert for the wife in McReath v. McReath (see BVWire #107-1), believes the case stands for the proposition that “the business appraiser should carefully analyze a business and trends in its income and expenses, and then reach an independent opinion.” The trial judge was critical of [...]
Sample of recent digests added to BVLaw
Boltar LLC v. Commissioner, 2011 WL 1314445 (U.S. Tax Ct.)(April 5, 2011) Tax Court rejects charitable easement appraisal under Daubert, finding the appraisers ignored the before and after method and rejected relevant facts in favor of those that exaggerated value. Experts: Integra Realty Resources (taxpayer); Steven Albert (IRS) Judge: Cohen State/Jurisdiction: federal Court: U.S. Tax [...]
DCF (plus tax-affecting) is more appropriate for partnership valuation than cap/earnings approach, says post-Bernier court
Back in 2007, the Bernier decision by the Supreme Judicial Court of Massachusetts was among the first to analyze the “bedeviling” issue of tax-affecting the income stream of a closely held corporation in divorce. (See BVWire #60-2) Recently—the same panel delivered an expedited opinion concerning the present value a husband’s interest in a highly lucrative hedge fund partnership. [...]
Great analysis of business valuation issues in Gupta and other divorce decisions
Here’s a great post by Mark Gottlieb in support of the use of appraisers in divorce and forensic proceedings…thanks, Mark!
AICPA launches new family law conference to fill the gap between its divorce valuation conferences with the AAML
Can’t wait for the AICPA/AAML event in 2012? Jerome Johnson (Burrage & Johnson, CPAs), and Chair of this new event describes the debut program as a must-attend “for practitioners considering making the leap into the field of litigation support within the family law arena – as well as for those who want to want to [...]
More problems using preliminary valuations in divorce
Divorce cases often catch an expert between a rock (limited client funds for valuing a smaller business) and a hard place (limited evidentiary weight accorded to a preliminary calculation of value). Sadly, parties and their attorneys frequently ask business appraisers to perform a preliminary valuation, “just for settlement purposes,” but as we noted in the [...]
Despite non-compete, patient records are ‘professional goodwill’
BVWire’s recent report on McReath v. McReath (BVWire # 96-2) reported that the Wisconsin Court of Appeals may have just revised the majority rule on the disposition of private practice goodwill to say that all salable goodwill is a marital asset, subject to division, whether corporate or professional. Further, a non-competition agreement can serve as [...]
Three fallacies when tax-affecting
If you’re confused about whether to tax-affect or not, at least consider some of the variables that Mark Harrison considers that undermine the “29.4% benefit” that seems to often appear post-Bernier and Delaware MRI. Harrison suggests at a minimum that you consider the three following adjustments to this standard methodology: Few private companies pay the [...]
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