The Tax Rules Were Never Friendlier, But Changes May be on the Way The biggest loophole in the tax code may soon be coming to an end—at least according to the messages sent by the Obama administration and its recent budget proposals. The American Taxpayer Relief Act of 2012 (ATRA) set a whole new tone for most estate plans when it took the dreaded estate tax off the table. However, it is no secret that the IRS has been making a concerted effort to recapture some of the revenues lost from property transfers by way of gift or upon death.…
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A White Paper Detailing Use of the Pluris Database to Develop a DLOM (Part I of III) Business valuation practitioners continue to debate the merits of different databases to develop a discount for lack of marketability (DLOM). In this first- of a three-part series, Marc Vianello discusses what the Pluris DLOM database is, explores how accurately Pluris transactions are reported, and discusses how the Pluris DLOM Database has been presented to the business valuation community.
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In re Marriage of Schneeweis, 2016 IL. App. 2d No. 140147 Marital law varies from jurisdiction to jurisdiction. In this article, Daniel R. Stefani discusses a recent Illinois Appellate Court case where the issue before the court was whether husband dissipated assets. The term dissipation is defined and the question raised is how much information do you share with your spouse and how that can impact an equitable division of marital property.
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Analysis of Unaudited Financial Statements—Who and How? There has been much discussion within the ESOP community about the “settlement” and its reverberations. As readers are likely aware, the settlement in question refers to the 2014 settlement agreement between GreatBanc Trust Company and the United States Department of Labor (DOL). The terms of the settlement include, among other things, an agreement concerning fiduciary engagements and process requirements for employer stock transactions. The settlement provides pause for thought for all trustees and their advisors, as the agreement can be viewed as a “playbook” that, if followed, could serve as evidence that the…
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Conduct a Systematic, Structured Research to Get Results How can an existing marketing plan be improved? In this article, Dr. Frederiksen outlines five steps a firm can use to strengthen an existing marketing plan.
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Ways 16 through 30 (Part II of II) This is the second part of this two-part article where the author presents fifteen other structures owners may want to consider as part of a succession plan. Click here to read part one.
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IRS Wins, Business Founders and their Families Lose Is cheap debt good for closely held families? Are closely held business overleveraged? Are FLP discounts about to come to an end? Why aren’t business founders and their families doing more to counter the proposed regulations that would target family business transfers? What should valuation professionals do in this environment? Dr. Sheeler answers these questions and argues in favor of a “holistic approach to wealth building of alternative assets held by these families by more dynamic leaders in these professions,” and suggests considering exit strategies that preserve family businesses; the nimble and…
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Ways 1 through 15 (Part I of II) This is the first of a two-part article, where Edward Mendlowitz shares fifteen of the thirty ways to structure a transfer of a business to a successor. Mendlowitz stresses that a succession plan is important and too often overlooked by business owner(s) involved in day-to-day operations. Capturing the value and having a strategy in place provides ongoing cash flow, a degree of financial security to the owner(s) and their family, and certainty to a host of people that have a business relationship with the subject business. Capturing that value should be a…
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Part III of III This is Part III of a three-part series discussing the basic components of a professional liability lawsuit brought against an accounting firm and its partners, and factors a firm’s managing partner should consider before and during this type of litigation for utilizing applicable insurance coverage, maximizing effectiveness of defense, and, where possible, bringing the controversy to conclusion by settlement. Part I covered the current litigation environment for accounting firms, relevant provisions in engagement letters, responding to subpoenas, professional liability insurance, and the risk of instigating a professional liability counterclaim in a fee collection action. Part II…
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Copyright Protection and the “First-Sale” Exception In 1997 Supap Kirtsaeng, a citizen of Thailand, moved to the United States to study mathematics at Cornell University. He paid for his education with the help of a Thai Government scholarship which required him to teach in Thailand for ten years on his return. Kirtsaeng successfully completed his undergraduate courses at Cornell, successfully completed a PhD program in mathematics at the University of Southern California, and then, as promised, returned to Thailand to teach. While he was studying at Cornell, Kirtsaeng asked his friends and family in Thailand to buy copies of foreign…
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in a Divorce Proceeding Not all is fair in love and war when it comes to the fight for business records within a matrimonial action. When one spouse is denied adequate discovery, his or her case can quickly begin to unravel. Usually, some records are available either because the spouse had some previous access or there was a partial document production. Business appraisers should consider all appropriate means to obtain needed discovery. Failing to obtain sufficient, reliable discovery can ultimately result in the production of a report that is incorrect and/or rejected by the courts.
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Part II of III This is Part II of a three-part series discussing the basic components of a professional liability lawsuit brought against an accounting firm and its partners and the factors a firm’s managing partner should take into consideration before and during this type of litigation for utilizing applicable insurance coverage, maximizing effectiveness of defense and, where possible, bringing the controversy to conclusion by settlement. Part I covered the current litigation environment for accounting firms, relevant provisions in engagement letters, responding to subpoenas, professional liability insurance, and the risk of instigating a professional liability counterclaim in a fee-collection action.…
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Part I of III This is Part I of a three-part series discussing the basic components of a professional liability lawsuit brought against an accounting firm and its partners; and the factors a firm’s managing partner should consider before and during this type of litigation for utilizing applicable insurance coverage, maximizing effectiveness of defense and, where possible, bringing the controversy to conclusion by settlement. Part I focuses on the current litigation environment for accounting firms, relevant provisions in engagement letters, responding to subpoenas, professional liability insurance, and the risk of instigating a professional liability counterclaim in a fee-collection action. Part…
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What to Ask and Look for When You Need a Forensic Expert In today’s legal environment, it is not sufficient to present unsubstantiated evidence. Many subject matter experts do not properly substantiate their findings. When hiring a subject matter expert, careful screening is crucial to choose an expert with superior skills and credibility. This article presents methodologies by which you can perform proper due diligence on your prospective subject matter expert.
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“I Should Have Known!” When you hear the news that someone was just arrested for committing fraud at their work, it is usually accompanied by fellow employees or managers saying one of two things. Either, “I never thought they were capable of stealing” or “I should have seen it coming.” Why do employers say that they “should have known” and how exactly is it that they should have known? In my experience, there are some common characteristics of people who perpetrate a fraud. And if business owners are aware and vigilant about their business, they might never have to say,…
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Valuation and Planning Impacts This article outlines the major provisions of the proposed regulations. If the proposed regulations are adopted in their current form, they only apply to transfers made after the final regulations are promulgated, and the most pervasive provisions of the proposed regulations, apply only to transfers made at least thirty days after the restrictions become final.
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Can Effect the Outcome of a Case One of the most critical decisions practicing attorneys have to face is the selection of a forensic accountant. The specialized training and expertise of forensic accountants and the role they play, either as consultants or as expert witnesses, can make the difference in the final outcome of a case. However, it is critical that the right person with the right expertise, training, and background be selected. This article will describe the various areas of specialization in which a forensic accountant performs, how to select the right professional for the job, and the benefits…
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Add Value and Differentiate Your Business Valuation Practice In this article, Dr. Sheeler issues a personal challenge to credentialed business valuation professionals. Dr. Sheeler challenges credentialed professionals to be more introspective and become more relevant in a market where commoditization does not enable clients and end users to understand the value professionals can and should bring. Dr. Sheeler adds that this realization has led him to write a Wiley Finance book called Equity Value Enhancement (EVE) and dig deep into the acronym GRRK. GRRK stands for Governance, Relationships, Risks, and Knowledge. Each is intangible, but their influence is very concrete…
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Income of Partners and Owners of Pass-through Entities (Part II of II) This is the second part of a two-part article where the author discusses the methodology for assessing the lost earning capacity of a self-employed person. This article provides an overview for analyzing the lost earning capacity of the self-employed and discusses why this category of work provides unique assessment situations. In this second part, the author discusses how to address fringe benefits, worklife, mitigation, the value of a business.
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Advise for Budding and Experienced Experts The third edition of The Comprehensive Guide to Lost Profits and Other Commercial Damages is marked departure from the prior editions. This two-volume set is replete with valuable information and insight from experienced practitioners.