Valuation: Case Overview
How do you value the family business? This is an issue that comes up in various ways and is a topic I anticipate discussing in future postings. Probably the largest number of cases reporting on valuations are those dealing with estate and gift tax issues. However, the issue comes up in shareholder disputes, divorces, and an election of a spouse to take his or her statutory share rather than that provided under the will. Generally the method of valuation will be selected by the appraiser. A critical question will be whether a marketability and/or minority discount should be applied.
A recent case out of the Kansas Supreme Court provides an interesting discussion on the topic. The case is In the Estate of Norman B. Hjersted, deceased, 175 P. 810 (2008).
http://www.jerrysblawg.com/2009/07/valuation-case-overview.html
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