In Berquist v. Commissioner, Judge Swift Finds a Company’s Pending Liquidation is Relevant and Foreseeable. The Tax Court valued closely-held stock in an anesthesiology practice donated to a hospital for charitable contribution purposes at its liquidation value since the anesthesiology practice would no longer exist after the physician-stockholders were consolidated into a newly-formed umbrella physician ma ...

In Nebraska, Judge Considers: Should Damages be Limited to the Length of a Non-Compete Clause? The Supreme Court of North Dakota prefers the testimony of an accredited appraiser, a Tennessee court asks an expert witness to stick to the topic rather than allowing him to recommend an alternative legal remedy, and a Nebraska court considers whether damages should be limited to those incurred during the period ...

Here’s How To Understand the Set-Up and Then Make Pre-Valuation Adjustments Valuation gets tricky when it involves complex ownership structures. Rand Curtiss explains how to approach the appraisal of companies that own interests in other companies, companies that charge fees to affiliated companies, and groups of companies that have several owners each holding different ownership percentages. ...

Plan for Death, Disability, and a Partner Wanting Out.  Here's Why.    John P. Napolitano,  CEO of U.S. Wealth Management in Braintree, Mass., and 2012 president of the Financial Planning Association of Massachusetts, explains why it's critical to think about the future, even if you're overwhelmed with work today: ...

Regular Marketing is Important, and Existing Clients Are One of the Best Sources of Referrals.  Here's How to Get the Best Return on Marketing Investment.  Ed Mendlowitz regularly fields questions from readers at CPA Trendlines.  Recently he opined on the importance of regular marketing.  One tip:  leverage your existing clients for referrals.  Specifically, he adds:   ...

Relative Levels of Equity and Debt Affect Risk and Cash Flow.   This Has Substantial Impact on Amount Investors Will Pay.     Matt Stelzman notes in the Chattanooga News TimesFreePress that the question that often arises in connection with a business valuation is whether the valuator should use the company's actual capital structure or its anticipated future capital structure. A valuator might also use a pr ...

Today Individual Federal Gift Law Exemption is $5.12M.  In Months it May Drop to $1M.  Result: Surging Demand for Appraisals.    Lou Carlozo at Reuters reports that faced with the possibility of the lifetime gift tax exemption dropping precipitously next year and the estate tax rate rising, wealthy individuals are rushing to transfer their assets to family members. More: ...

This Long Term Plan Is of Particular Use to Owners of Illiquid Privately Held Companies Consultants can help business owners planning a sale by helping them understand how a charitable remainder trust might help. These trusts can significantly reduce owed taxes and ensure owners receive regular income in return for donating cash, securities, or real estate to a charity. It’s of particular use for owners of ...

Shared Values and Employee Practices Drive Increased Productivity, Loyalty, and Best Customer Service The shared values and practices of employees in a company have real value that can be just as critical to a company’s success as its physical assets and market potential. Employees who passionately enjoy their work tend to be more productive, have increased employer loyalty, and offer better customer servic ...

The Best Experts Increase Odds of Winning by Devising Strategy, Guiding Discovery, and Enhancing the Quality of Daubert Challenges Donald M. May at Claims Journal explains how the best expert witnesses increase odds of winning by devising strategy, guiding discovery, and enhancing the quality of Daubert challenges.  Here are the sort of queries—about specific topical expertise, testimony record, exclusion h ...

Intangible Assets, Switching Costs, Network Economies, and Cost Advantage Provide a Critical Edge Ron Stacey contends the answer is not a dominant market share, efficiency, or even a talented management team. Companies with lasting advantage tend to be strengthened by intangible assets, switching costs, network economies, and cost advantage. Find out why.  ...

Restaurant Chains Have Managed to Combine Quality Control, Cost Control, and Innovation. Can Health Care?   Physician and writer Atul Gawande publishes an essay in the New Yorker today that discusses how the Cheesecake Factory delivers good food at reasonable prices while meeting rigorous metrics (it throws away only 2.5% of all its groceries, for instance), and explores whether and how the lessons of Chees ...

Of an Estimated $72B Raised by U.S. Buyout Sponsors Through Mid-Year, 43% Has Gone to Mega-Funds  PE Hub opines that while many LPs claim they favor small- to mid-sized business investments, that this year the numbers are beginning to tell a different story.   There is increased investment in buyout funds doing deals of $1 billion or more in size.   It may be that mega-funds  while less are simply the only ...

Six Initial Public Offerings Seek to Raise $1.1 Billion  The IPO market is set for its biggest week since Facebook Inc.'s FB +4.98% troubled offering in May, with Manchester United Ltd. and the operator of Outback Steakhouse among those scheduled to hit the tape, reports the Wall Street Journal.   More: ...

Bond King Says Stocks are Dead:  Believes Consistent, Annual Returns Are "Thing of the Past."  On the Horizon?  Inflation. “The cult of equity is dying,” Bill Gross wrote in his August Investment Outlook, the Wall Street Journal's Market Beat blog reports.    “Like a once bright green aspen turning to subtle shades of yellow then red in the Colorado fall, investors’ impressions of ‘stocks for the long run’ ...

CPA Firms Emphasize Privacy Efforts as Pressure Mounts From Regulatory Requirements, Professional Standards, and Client Expectations  CPA firms and other businesses that maintain confidential client data are vulnerable to external and internal threats, including inadvertently leaking data and being targeted by hackers, reports the Journal of Accountancy.  Seven steps can help businesses assess which data ne ...

Enterprise Value is a Perpetuity Concept, but Shareholder Level Values Depend on Expected Holding Periods.  Here’s Why the Difference Matters.  The conceptual logic regarding the income approach is difficult to refute, writes Chris Mercer on the Valuation Speak blog.  What can cause expected cash flows to minority shareholders to be less than the expected cash flows of the enterprise? What can cause the exp ...

It’s Prime Time for Estate Planning Market volatility may be tough on the nerves, opines the Wall Street Journal, but it could be a boon for wealthy families looking to shelter assets from taxes while helping their children.  Here’s how to  devise strategies on discounts, GRATs, and loans.  Additional advice:  take advantage of low interest rates and exploit the federal gift-tax exemption. ...

When Crossing or Responding to Your Opposing Expert Witness, Look for the L.I.E. (Large Internal Error) Dr. Ken Broda-Bahm cross-examines experts looking for the L.I.E (Large Internal Error).  He doesn’t always find one.  But when he does, he no longer needs to claim his expert would have done it differently or done it better.  He simply points out a liar—and dramatically wins the jury over.  Here’s how. ...