A Selection Of Our Services
Gift/Estate Tax Valuation
MPJ Business Valuations has extensive experience in valuing stock in C Corporations, S Corporations, Limited Liability Corporations (LLC), Partnerships and Sole Proprietorships for gift and estate tax purposes. When filing a gift or estate tax return, it is normally recommended to support the filing of transfers of business interests with a business appraisal. Supporting a tax return with a business appraisal has several benefits including meeting the Internal Revenue Service’s requirements for disclosure which is important to start the statute of limitations [Internal Revenue Code 6501(c)(9)].
The value of an operating company varies with time and is dependent primarily on the future expected earnings or net proceeds from the dissolution of the company and sale of the underlying assets. There are multiple factors that must be taken into account when valuing an operating business including sales and earnings growth, competition, government regulations, personal goodwill, leverage, diversification, to name a few. A good business appraisal will take these factors into account and objectively explain their impact on value in the report. For transfers of minority interests, discounts for lack of control, lack of marketability and lack of voting rights are important issues in determining value. The principals of MPJ Valuations routinely speak on discounts, tax and other valuation factors at AICPA, ASA, NACVA and other conferences.
Family Limited Partnerships
Family limited partnerships (FLPs) as a form of organization have been used by business owners and tax planners for many years. One of the benefits of FLPs is the simplified gifting of property interests to family members. Clients often own property, such as real estate, that is difficult to divide among children and other potential donees. Giving fractional undivided interests in property may be legally possible, but not practical if the client wants to keep the property ownership intact within the family unit. Gifting partnership interests to family members is much easier and provides significant other benefits as well.
MPJ Business Valuations has extensive experience in valuing FLPs and defending the appraisals in court. The principals of MPJ Business Valuations have served as instructors and course developers for FLP seminars for other business appraisers. In addition the principals have authored a book titled The Comprehensive Guide for the Valuation of Family Limited Partnerships and are contributing authors for PPC’s Guide to Business Valuations and Business Valuation Resources’ Gift and Estate Tax Guide.
Promissory Notes/Debt Securities
Privately held debt is often used when the stock of a company or a partnership interest in a family limited partnership is sold and the seller accepts a promissory note from the buyer. The value of the promissory note may change depending on fluctuations of interest rates and the other terms of the notes. Consequently, the market value of a promissory note may be less than its current balance.
Stock Gift Valuation
When valuing a gift of stock there are some crucial questions to ask. Does the stock have income rights? Can it be sold back at any time? Does the stock have voting rights? How is the operating agreement structured? MPJ Business Valuations can help you accurately value a gift of stock based on what it entitles you to, not just its current market value.
Valuing the Sale of a Company
No company has one single value. At MPJ Business Valuations we can give you a range of valuations based on the perspective of what we think is the maximum you could ask as the seller and the minimum we would recommend that a serious buyer offer, allowing you to make a fully informed decision in any price negotiations.
MPJ Business Valuations provides thorough, professional valuations that aid in the settlement of shareholder and broken contract disputes. We treat every valuation we make as if it’s going to court and have stood and testified to the values we provide on numerous occasions for both the plaintiff and the defendant.