In this episode, the Brach Eichler Tax Team breaks down the recent Tax Court decision in Pierce v. Commissioner, which dives deep into the use of the discounted cash flow (DCF) method and the complex issue of tax affecting in valuing closely held businesses for gift tax purposes. Although not precedential, the court's analysis offers valuable guidance on real-world valuation strategies, including projected cash flow, discount rate, terminal value, and non-operating assets.
Listen in as we unpack how the court weighed expert testimony, analyzed risk adjustments like shareholder disputes and marketing gaps, and addressed the Delaware Chancery method for tax affecting. If you're advising clients on gifting interests in private businesses, this case is one you don’t want to miss.
📩 For guidance on how these valuation principles may affect your estate or gift tax strategy, contact: - David J. Ritter at dritter@bracheichler.com | 973-403-3117 - Stuart M. Gladstone at sgladstone@bracheichler.com | 973-403-3109 - Robert A. Kosicki at rkosicki@bracheichler.com | 973-403-3122 - Cheryl L. Ritter at critter@bracheichler.com | 973-364-8307
*This is intended to provide general information, not legal advice. Please contact the authors if you need specific legal advice.
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