Book description
Praise for Business Valuation and Federal Taxes Procedure, Law, and Perspective Second Edition
"The Honorable David Laro and Dr. Shannon Pratt present a comprehensive primer on federal tax valuation controversies that will benefit both tax practitioners (attorneys and CPAs) and valuation practitioners. . . . It serves as a valued reference source and an introductory text for legal and valuation training."
—Roger J. Grabowski, Duff & Phelps Corp. from the Foreword
"[I]t is refreshing to see these two close observers of valuation issues collaborate on this intriguing volume. What the reader gets is something like a mural—depicting the life of a business appraisal from conception to preparation to the occasional ultimate use by a trier of fact."
—Ronald D. Aucutt, Esq.McGuireWoods LLP, from the Foreword
"This offering from Judge David Laro and Dr. Shannon Pratt fills in some persistent gaps in the business valuation literature, as well as a surprisingly fresh treatment of perennial themes."
—John A. Bogdanski, Professor of LawLewis & Clark Law School, from the Foreword
Straightforward guidance and perspective on business valuation from two of the nation's top authorities
Written by Senior Judge David Laro and Shannon Pratt, both leading experts on the subject, Business Valuation and Federal Taxes, Second Edition provides a comprehensive overview of business valuation procedures.
The new edition offers:
Insightful perspectives of personal versus enterprise goodwill
New materials on transfer pricing and customs valuations and how recent markets have affected both the income and market approaches
Timely coverage of FAS 157 and its many changes to penalties and sanctions affecting both taxpayers and appraisers
Exploration of new court cases
Presenting knowledge and guidance to those who perform valuations as well as those who are affected by them, Business Valuation and Federal Taxes, Second Edition is the essential guide to federal taxes and valuation, and specifically valuations relating to business interests.
Table of contents
- Cover
- Title Page
- Copyright
- Dedication
- Foreword to Second Edition
- Foreword: Legal Practitioner's Perspective
- Foreword: Law Professor's Perspective
- Foreword: Business Appraiser's Perspective
- Preface to the New Edition
- Acknowledgments
- About the Authors
- Chapter 1: Standards of Business Valuation
- Chapter 2: Subsequent Events
-
Chapter 3: Business Valuation Experts
- Summary
- Introduction
- Proving Business Value
- The Expert Appraiser
- Types of Experts
- Various Roles of Experts
- Business Valuation Litigation Witnesses
- Admissibility of Evidence Underlying Expert Opinions
- Limitations to Admissibility
- Reliability of the Expert
- Minimum Thresholds for the Business Valuation Expert
- Sarbanes-Oxley Act of 2002
- Attorney Assistance to the Expert
- Qualified Appraiser
- Concerns about Expert Testimony
- Court-Appointed Expert
- Conclusion
- Appendix: Expert Credentials and Qualifications
- Chapter 4: Sources of Law and Choice of Courts
- Chapter 5: Burden of Proof in Valuation Controversies
- Chapter 6: Penalties and Sanctions
- Chapter 7: How the Form of Entity Affects Valuation
- Chapter 8: Valuation of S Corporations and Other Pass-Through Tax Entities: Minority and Controlling Interests
- Chapter 9: Transfer Pricing
- Chapter 10: Customs Valuation
- Chapter 11: Adjustments to Financial Statements
- Chapter 12: Comparative Financial Statement Analysis
- Chapter 13: Economic and Industry Analysis
- Chapter 14: Site Visits and Interviews
-
Chapter 15: The Income Approach
- Summary of Approaches, Methods, and Procedures
- Introduction to the Income Approach
- Net Cash Flow: The Preferred Measure of Economic Benefit in the Income Approach
- Discounting versus Capitalizing
- Relationship between Discount Rate and Capitalization Rate
- Projected Amounts of Expected Returns
- Developing Discount and Capitalization Rates for Equity Returns
- Weighted Average Cost of Capital (WACC)
- The Midyear Convention
- The Income Approach in the Courts
- Conclusion
- Appendix: An Illustration of the Income Approach to Valuation
-
Chapter 16: The Market Approach
- Summary
- The Market Approach
- Revenue Ruling 59-60 Emphasizes Market Approach
- The Guideline Public Company and the Guideline Transaction (Merger and Acquisition) Method
- How Many Guideline Companies?
- Selection of Guideline Companies
- Documenting the Search for Guideline Companies
- Choosing Multiples Based on Objective Empirical Evidence
- What Prices to Use in the Numerators of the Market Valuation Multiples
- Choosing the Level of the Valuation Multiple
- Selecting Which Valuation Multiples to Use
- Assigning Weights to Various Market Multiples
- Sample Market Valuation Approach Tables
- Other Methods Classified under the Market Approach
- Conclusion
- Appendix: An Illustration of the Market Approach to Valuation
- Chapter 17: The Asset-Based Approach
- Chapter 18: Entity-Level Discounts
- Chapter 19: Minority Discounts/Control Premiums
-
Chapter 20: Discounts for Lack of Marketability
- Summary: General Introduction to Shareholder-Level Discounts and Premiums
- Definition of Marketability
- Benchmark for Marketability Is Cash in Three Days
- Investors Cherish Liquidity, Abhor Illiquidity
- Degrees of Marketability or Lack Thereof
- Empirical Evidence to Quantify Discounts for Lack of Marketability: Restricted Stock Studies
- Empirical Evidence to Quantify Discounts for Lack of Marketability: Pre-IPO Studies
- Criticisms of the Pre-IPO Studies
- Factors Affecting the Magnitude of Discounts for Lack of Marketability
- Use of the Databases for Quantifying Discounts for Lack of Marketability
- Discounts for Lack of Marketability for Controlling Interests
- Option Pricing as Indicator of DLOM
- Discounts for Lack of Marketability in the Courts
- Conclusion
- Partial Bibliography of Sources for Discounts for Lack of Marketability
- Chapter 21: Other Shareholder-Level Discounts
- Chapter 22: Personal versus Enterprise Goodwill
- Chapter 23: Weighting of Approaches
- Chapter 24: IRS Positions
- Chapter 25: Business Appraisal Reports
- Chapter 26: Valuation of Options
-
Chapter 27: Questions to Ask Business Valuation Experts
- Summary
- Qualifications
- Financial Statement Adjustments and Analysis
- Economic and Industry Data
- Site Visits and Interviews
- General Questions about Methodology
- Discount and Capitalization Rates in the Income Approach
- Projections Used in the Income Approach
- Asset-Based Approach
- Entity-Level Discounts
- Minority Interest Discounts/Control Premiums
- Discounts for Lack of Marketability
- Voting/Nonvoting Stock
- Questions about Contradictory Prior Testimony
- Appendix A: International Glossary of Business Valuation Terms
- Appendix B: Bibliography
- Table of Cases
- Index
Product information
- Title: Business Valuation and Federal Taxes: Procedure, Law and Perspective, 2nd Edition
- Author(s):
- Release date: May 2011
- Publisher(s): Wiley
- ISBN: 9780470601624
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