June 2023 What happens when an owner pays him or herself a non-market rate of compensation? This month’s legal update presents, Mekhaya v. Eastland Food Corp., 287 A.3d 395; 2022 Md. App. LEXIS 938 (Md. Ct. App. December 22, 2022). In that case, an appellate court discusses what can happen when owners use their control prerogatives to pay owner employees more than a market rate for the services they provide to the organization. Owner managed privately held businesses can sometimes play fast and loose with characterizations of employment compensation and equity holder dividends/distributions. Tax preparers will sometimes raise concerns that…
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and other Court Cases for Valuation and Litigation Support Professionals Valuation practitioners may want to spend a few hours reading a recent U.S. Tax Court case where the valuation of intangible assets was squarely addressed. This QuickRead article highlights the facts and three issues addressed in the decision.