Willamette Perspectives
April 2024
Editors for this issue: Nathan P. Novak, Director of our Chicago office and Timothy J. Meinhart, Managing Director of our Chicago office.
Control Considerations in the Valuation of a 50 Percent Ownership Interest
Chad M. Kirkland
In valuations developed for gift tax, estate tax, and generation-skipping tax purposes or income tax purposes, valuation analysts may be asked to determine the fair market value of a 50 percent interest in a private company. The issues to consider and analyze in selecting appropriate valuation adjustments to apply in the valuation of a 50 percent interest often are unique compared with the issues in the valuation of a less than 50 percent interest (e.g., a 48 percent interest) or a more than 50 percent interest (e.g., a 52 percent interest or a 100 percent interest).
The Expatriation Tax: How to Present Assets to the IRS When You Say Goodbye to the United States
Samuel S. Nicholls
Longtime U.S. residents who wish to leave the country as a permanent resident might be subject to the expatriation tax. There are important considerations regarding the valuation of assets that are reported to the Internal Revenue Service (“IRS”). The value of those assets affects the level of tax that is paid. In addition to retaining appropriate legal and tax counsel, for certain types of assets – stock or limited partnership interests, real property, and fine art and gems – enlisting the services of a credentialed appraiser, otherwise known as a valuation analyst, may be advisable for reporting the assets’ estimated value on IRS Form 8854.
The Valuation of Controlling Ownership Interests in the Context of Gift Tax Planning
Timothy J. Meinhart
The increase in the federal lifetime gift and estate tax exemption amount that resulted from the Tax Cuts and Jobs Act of 2017 provides for unique wealth planning opportunities. Many of these opportunities involve the transfer of noncontrolling and controlling ownership interests in privately held operating business entities. The valuation of a controlling ownership interest in a business entity for transfer tax purposes may involve the application of a control premium. The selection and application of a control premium can have a significant effect on the concluded value of the transferred business interest. This article discusses the application of a control premium in the valuation process and the guidance that is available to assist the valuation analyst in properly quantifying the control premium.
Willamette Insights and Perspectives Back Issues
January Perspectives
Editors for this issue: Justin M. Nielsen and Lisa H. Tran
- The Applicability of Discounts for Lack of Marketability on Controlling Ownership Interests By Lerry A. Suarez and Eliza Jones
- Higher Interest Rates and Tax Exemptions May Maximize Benefits in Gift and Estate Tax Planning By Lisa H. Tran
- Key Person Considerations When Valuing Private Companies in a Gift and Estate Tax Context By Justin M. Nielsen
October 2023 Perspectives
Editor for this issue: Weston C. Kirk
- Preferred Equity in a Rising Interest Rate Environment By Ben R. Duffy and Jacob L. Hudson
- Considerations for Valuing the Stadium Seat Licenses of Sports Teams for Estate Tax Purposes By Jackson Crispin
- Convertible Bonds as a Component of a Company’s Capital Structure By Keegan M. Pando and Weston C. Kirk
July 2023 Perspectives
Editor for this issue: Timothy J. Meinhart
April 2023 Perspectives
Editor for this issue: Charles Wilhoite and Scott Miller
Winter 2023: Best Practices
Editor for this issue: Robert F. Reilly, CPA
Transfer Tax Valuation Thought Leadership
Damages Measurement Thought Leadership
Property Appraisal Thought Leadership
Fair Value Measurement Thought Leadership
Valuation, Damages, and Transfer Price Thought Leadership
Reasonableness of Compensation Analysis Thought Leadership
Autumn 2022: Thought Leadership in Wealth Transfer Valuation Issues
Editor for this issue: Weston C. Kirk
Estate and Gift Tax Planning Thought Leadership
- Economic Uncertainty: A Certain Time to Reevaluate and Estate Plan (Emily A. Dabney, Esq)
- Understanding the Grantor Retained Annuity Trust (John H. Sanders Jr. and Dakota K. Ask)
- Disguised Dividends and Shareholder/Employee Compensation (Eliza Jones and Lisa H. Tran)
- Valuation of Promissory Notes for Transfer Tax Purposes (Timothy C. Ladd)
- Valuation Considerations for Preferred Equity Interests (Ben R. Duffy and Aiden B. Gonen)
- Climate Change and Business Valuation (Barry W. Purnell)
- Estimating the Blockage Discount in the Fair Market Value of Publicly Traded Company Restricted Stock (Chad M. Kirkland)
Income Tax Thought Leadership
Bankruptcy Thought Leadership
Summer 2022: Thought Leadership in Professional Practices and Licenses Valuation, Damages, and Transfer Price Analyses
Editor for this issue: Samuel S. Nicholls
Professional Practice Valuation, Damages, and Transfer Price Thought Leadership
- Professional Practice Intellectual Property Valuation, Damages, and Transfer Price Analyses (Nicholas J. Henriquez and Robert F. Reilly, CPA)
- Valuation of Professional Licenses and Other Individual Intangible Assets (Nathan P. Novak and Robert F. Reilly, CPA)
Professional Practices and Licenses Valuation Thought Leadership
Income Tax Thought Leadership
Winter 2022: Thought Leadership in Unit Valuation Principle Property Tax Appraisals
Editors for This Issue: Connor J. Thurman and John C. Ramirez
Intellectual Property Valuation
- Valuation Adjustments related to the Use of Capital Market Data in Developing Unit Principle Property Appraisals (John C. Ramirez, Robert F. Reilly, CPA, and Charlene M. Blalock)
- Intellectual Property Valuations for Property Tax Purposes (Barry W. Purnell, Robert F. Reilly, CPA, and Charlene M. Blalock)
- The Property-Specific Risk Premium and Unit Principle Property Appraisals (Connor J. Thurman and Robert F. Reilly, CPA)
- Common Misconceptions regarding the Measurement of Obsolescence in Unit Principle Appraisals (Connor J. Thurman and John C. Ramirez)