Whether there is a divorce and the value of marital assets is questioned or there is a partner or shareholder dispute over the value of a closely held company, the parties involved generally approach the value from two very different vantage points. Managing the expectations of the parties involved can result in substantially lower professional fees and more satisfied clients.

Over the years Valuation Services, Inc. has valued hundreds of fractional ownership interests in various entities. Over this time period VSI has determined the valuation discounts to be used in gift and estate tax returns for numerous clients and has defended these valuation discounts at various levels, including negotiating with IRS agents and in the United States Tax Court. In fact, at a recent Tax Court case, the professionals at VSI were identified by the court as the more credible expert witnesses in the case at hand.

Preserve Your Stock Wealth,
Fund a Family Entity with Marketable Securities

Many taxpayers have discovered that one of the best vehicles for preserving the family wealth is to establish a family limited partnership ("FLP") or other family entity funded with marketable securities. This opportunity can significantly reduce future estate tax liabilities. However, it is possible that the IRS will act soon to minimize this tax saving strategy. As always, a forward thinking, long term financial and estate planning strategy can have huge rewards. Don’t delay, you may miss out! Please read on…

New Adequate Disclosure Regulations Issued for Gift Tax Returns

The new Internal Revenue Service regulations state that the period of limitations on the assessment of a gift tax will begin only if there is adequate disclosure. The adequate disclosure requirements will be considered satisfied if the donor submits an appraisal of the gift prepared by a qualified appraiser.

There are four very important questions to answer in order for a start up Internet/e-commerce company to attract capital. These are: What is the company worth today? What could it be worth in the future? How long will it take to create that value? What is the likelihood (risk) of achieving success? The answers to these questions are critical in attracting outside capital. In this issue of Eye on Value we will focus on the first question relating to the current valuation.

Mediation & Arbitration – Positive Alternatives in Dispute Resolution

When two parties try to settle a legal dispute, litigation is often the method used to try to resolve these disputes. Litigation is frequently costly, time consuming, and can wear down both sides. Whether it is a shareholder dispute, valuation issues in a divorce, determination of damages, or the fairness of a transaction, the professionals at The Zitelman Group ("TZG") and Valuation Services, Inc. ("VSI") are frequently hired to help resolve these tough issues. In addition, we are there to provide alternatives to litigation.

In deciding whether Section 2036 was applicable, the Tax Court in both cases pointed out a number of factors that caused them to rule in favor of the IRS. One major factor related to the FLP's failure to conduct activities in a business-like manner after its formation. In both cases, the Tax Court found that the FLP(s) did not conduct their activities like a normal business enterprise, and as a result, an implied agreement was inferred that the decedent would retain the benefits of the transferred assets.