Taxes and Value: The Ongoing Research and Analysis Relating to the S Corporation Valuation Puzzle provides a conceptual framework and practical guidance for valuing pass-through entities. Authors Nancy Fannon and Keith Sellers present the findings of decades of research on the impact of taxes on firm value. They demonstrate that historical market returns impound the effects of shareholder taxes, and how these returns can be adjusted to estimate a cost of capital appropriate for valuating a pass-through entity. Learn more >>
Advanced Web Workshop (Training pack with complete recording)
Taxes & Value (Originally aired May 20, 2015)
If you missed Nancy Fannon and Keith Sellers in the special 4-hour workshop, get the training pack! Fannon and Sellers challenged traditional notions about the differences in value between a pass-through entity and the public market C corporation and revealed an abundance of research that showed that shareholder-level taxes do indeed affect a firm’s value. Learn more >>
Webinar (Training pack with complete recording)
How the IRS Values Non-Controlling Interests in S Corps (Originally aired on June 16, 2015)
The IRS internal white paper, "The IRS Valuation of Non-Controlling Interests in Business Entities Electing to be Treated as S Corporations for Federal Tax Purposes," which was written to help IRS professionals who are examining S corp valuations, presents background on this topic area from the perspective of the IRS. Former IRS employee Michael Gregory will provide insights to help BV professionals respond to this commentary. Learn more >>
There are no easy answers to the myriad of questions around valuing pass-through entities - the ongoing research is dense and complex. The cutting-edge resources below from BVR comprise authoritative thought leadership on the issue of S corps, taxes and valuation. BVR brings case studies from the real world together with the latest in academic research to inform the thinking among all stakeholders in the S corporation debate and pass-through entity puzzle.
Nancy Fannon answers: What are we adjusting for when we apply an S corporation premium?
Nancy Fannon answers: How analysts can apply a new method and improve their use of existing S corporation premium methods.
- IRS JOB AID: Valuation of Non-Controlling Interests in Business Interests in Business Entities Electing to be Treated as a S Corporations for Federal Tax Purposes - A Job Aid for IRS Valuation Analysts
- New Book is Major Advance in Thinking About S Corp Taxes and Value
(Originally published in the April 2015 Business Valuation Update)
- Ongoing Research Related to the S Corp Valuation Puzzle
(Originally published in the May 2015 Business Valuation Update)
- Excerpt from "Taxes and Value: The Ongoing Research and Analysis Relating to the S Corporation Valuation Puzzle"
- Transcript from September 2013 webinar "S Corps...What a Long, Strange Trip It's Been"
- The FMV Restricted Stock Study
The most current source for empirical data on restricted stock used to determine a discount for lack of marketability.
- Valuation Advisors Lack of Marketability Discount Study
The leading source for IPO data used to determine a discount for lack of marketability using pre-IPO data.
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Nancy Fannon compares the cashflow models currently used for S corporation analysis in the Tax Court, and other Courts.
Publication: How the IRS Values Non-Controlling Interests in S Corps with Job Aid Commentary by the Original IRS Champion
The IRS internal white paper entitled “The IRS Valuation of Non-Controlling Interests in Business Entities Electing to be Treated as S Corporations for Federal Tax Purposes, A Job Aid for IRS Valuation Professionals” is reviewed and Michael Gregory provides insights to help the business appraiser respond to this commentary. Learn more >>