Blog - Page 2

Defined value gifts can be used to minimize gift tax on transfers of difficult-to-value assets, such as interests in a closely held business or family limited partnership. In this article BCC Advisers summarizes a recent U.S. Tax Court case that demonstrates the importance of using precise wording in transfer documents to protect transfers against unintended adverse tax outcomes.

Nelson v. Commissioner, T.C. Memo 2020-81 (June 10, 2020).

Forensic investigations almost inevitably require documentary evidence to be examined. Experts often look beyond the content of documents. They also may consider physical and latent evidence — such as handwriting, alterations, and faded or decomposed material. In this article BCC Advisers describes the objectives of questioned document examinations, the standards that may apply and the technological tools that experts use to analyze documents.

Typically, a vast amount of a business owner’s net worth is tied up in their company, particularly if related real estate is owned by the company or a related entity. When transitioning ownership of your business, you must decide whether to keep the real estate or sell it. Sale-leasebacks are becoming more common to unlock additional value for a seller.

Changes in business values during the pandemic may necessitate updates to companies’ buy-sell agreements. In this article BCC Advisers describes three common valuation methods used for buyout purposes — 1) prescribed formulas, 2) negotiated prices, and 3) independent appraisals — and how valuation experts can help owners implement buy-sell agreements that cover all the value-related bases.

During the pandemic, virtual meetings have been used widely for various legal purposes, including court hearings, depositions, settlement talks and M&A negotiations. In this article BCC Advisers identifies potential pitfalls and ways to avoid them when conducting virtual meetings or testifying remotely. A sidebar highlights another lesson learned during the pandemic: Recycling valuation reports can be perilous, except in rare situations.

Given the current federal deficit and proposed spending, it is only a matter of time before tax rates are increased. If you have considered transitioning ownership of your business, you should act sooner, rather than later.

In Kress v. United States, a federal district court accepted the practice of tax affecting the earnings of so-called “pass-through” entities. It also rejected the application of a premium to reflect the tax advantages of owning a minority interest in a pass-through business. This article summarizes this case and explains why it’s fueling renewed interest in the tax-affecting debate, despite its limited precedential value. A sidebar highlights another key issue addressed in Kress — the effect of family transfer restrictions on the value of business interests for gift and estate tax purposes.

Professional standards require valuation experts to perform assignments with impartiality, objectivity and independence. This article summarizes a recent U.S. Tax Court opinion that serves as a cautionary tale for attorneys who would seek to influence an expert’s conclusions. The court found that a law firm’s interference in the valuation process tainted the expert’s opinion and rendered it “useless.” A sidebar explains why taxpayers can’t hire experts as an “insurance policy” against blatant tax avoidance strategies.

Struggling businesses face different financial challenges than healthy ones do. In this article we discuss how business valuation experts factor these differences into their estimations when valuing troubled companies.

Increased gift tax exemptions paired with lower values create a unique opportunity to efficiently transfer assets and ownership interests, however, the window may be closing. BCC financial analyst Jackson Arndt discusses why now is the time to act.