The Hempstead Letter:

Vol. XXV, No. 1

§ 409A Stock Option Valuation Regulations Issued
FLP Discount Nixed by Pennsylvania Court
Revised Valuation Guidelines for Private Equity Issued

Vol. XXIV, No. 2

Tax Court Okays 50% Valuation Discount
Sub-S Corp Valuation Issues

Vol. XXIV, No. 1

Lack of Business Appraisal Is One Indicator That Note Transaction Was Not Bona
Valuation Discount Issue Not Reached Due to Problems With FLP Formation
Buy-Sell Agreements Less Effective in Value Reduction When Decedent Retains Controls

Vol. XXIII, No. 5

Tax Court Sets FLP Discounts for Lack of Marketability and Minority Interest
Land and Timber Summation Rejected by Court
Massachusetts Considers GRATs in the Wake of Strangi

Vol. XXIII, No. 4

Present Value Rather Than Full Value of Built-In Capital Gains Used To Compute Value of Minority Interest
New Strangi Decision Further Clarifies Bona Fide Exception
Fully Documented and Supported Appraisal Reports Significant to Recovery of Costs and Fees

Vol. XXIII, No. 3

Investors and Regulators Question Reliability of “Non-Independent” Fairness Opinions

Vol. XXIII, No. 2

SEC Provides Guidance on Employee Stock Option Valuation

Vol. XXIII, No. 1

Probative Value of Pre-Valuation Date and Post-Valuation Date Transactions Determined
Restrictive Non-Price Terms in Buy-Sell Agreement Adequately Accounted for in General Marketability Discount

Vol. XXII, No. 1

Marginal Credentials Undermine Taxpayer’s Appraiser’s Report
FASB Issues Proposal on Fair Value Measurements
Delaware Chancery Court Uses Common Sense In Selecting Appraisal Methods
Hempstead Appraisers Attend AITF

Bulletin, September 2003

Vol. XXI, No. 1

Federal Court Raises Bar for Expert Valuation Testimony
Tax Court “Digs Deeper” in Determining Valuation Discounts in a Family Limited Partnership
A Contemporaneous Appraisal Can Help Defuse “Cheap Stock” Issues on IPOs
Some Tips on Making FAS 142 Work
Happenings at Hempstead & Co.

Vol. XX, No. 2

Recent Tax Court Decisions May Result in Higher Tax Bills for Some S Corporation Shareholders
Valuation Issues Play a Critical Role In S Corporation Conversions
Appraisal Issues Task Force Broadens Mandate to Include Stock Option Valuation Issues
Happenings at Hempstead

Vol. XX, No. 1

Reducing Fiduciary Liabilities
Transfer Pricing Studies –Critical in Supporting Royalties
Superior Court Denies Valuation in Martial Dissolution
The Hempstead Bulletin, October 10, 2002

Vol. XIX, No. 3

FASB’s New Merger Pronouncements – Q & A
Tax Court Supports 40% Discount in FLP Case

Vol. XIX, No. 2

Simplot Decision Reversed
New Merger Rules Stress Goodwill Valuation
Family Limited Partnership Issues Tested Again

Vol. XIX, No. 1

Tax Court Reaffirms Taxpayer-Friendly 2704(b) Position on FLP’s
Discounts for Trapped-in Capital Gains
M&A Pricing Data Released

Vol. XVIII, No. 1

Tax Court Blunts Impact of 2704(b) On Valuation of FLP’s
Stock Option Valuations: The Basics – Part II
Court Sets “S” Corp. Valuation Guidelines

Vol. XVII, No. 2

Conduct of the Parties Now a Factor in New Jersey Fair Value Determinations

Vol. XVII, No. 1

Unique Capital Structure Leads to Large Valuation Premium
The Tricky “Base Line Balance Sheet”
Stock Option Valuations: The Basics – Part I