The Ongoing Research and Analysis Relating to the S Corporation Valuation Puzzle What premium, if any, should S Corporations command? How reliable are the current models? How reliable is the evidence that supports the position of the leading U.S. Tax Court cases? What should valuation analysts and consultants consider as they advise newly formed corporations considering making the S election and S corporation shareholders that are about to discuss buy-sell agreements? In this book, Fannon and Sellers critique existing theory and practice and propose a new model to value S corporations.
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When Using Guideline Transaction Data Income taxes play a major role in the pricing and structure of business transactions because income tax consequences associated with the sale or purchase of a business can substantially reduce the seller’s net proceeds and/or lower the net cost of a purchased ownership interest to the buyer. Because of this issue, it seems appropriate to assume that actual transactions are structured by buyers and sellers to address such income tax consequences. This article addresses the impact of federal income taxes on transaction prices and terms, and considers the impact of taxation on the selling prices…