‘Just say no’ to tax-affecting: Analysts respond
In last week’s BVWire, we quoted an IRS attorney as saying that he stood firm on the legal as well as IRS precedent that absolutely rejects tax-affecting the value of pass-through entities. As you might imagine, the remarks (the opinion of the speaker, not the IRS) generated some feedback from fellow panelists at the ASA [...]
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. [...]
The tax-effecting discussion continues
In response to last week’s item on tax-effecting (BVWire #102-2), Nancy Fannon (Fannon Valuation Group) responded: If attorneys (or analysts) are taking the position that S corp. earnings should not be tax-affected, it is because they do not really understand the difference between corporate level taxes and personal level taxes, and how each of these [...]
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 [...]
Every one wonders: will tax changes drive the cost of capital higher?
What will happen to tax-affecting if the government sits on its hands until January 1, and the tax rate on most capital gains increases from 15 percent to 20 percent. The tax rate on qualified dividends will increase from 15 to 39.6% (or whatever the individual taxpayer’s tax rate for that year is). Business owner [...]
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