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NEW JERSEY COURT USES VALUATION DISCOUNT TO PUNISH “BAD BOY”

Introduction Richard and Steven Parker are brothers who ran a flower business in Scotch Plains, New Jersey.  Richard is the President of Parker Interior Plantscapes (“PIP”), which installs and services plants and flowers in commercial settings.  Steven is the President of Parker Wholesale Florists (“PWF”), which is a garden center.  Each are vice presidents of […] More...

Dell Appraisal Spawns a Multitude of Valuation Approaches

February 2017 | Issue 84 Introduction A Delaware Chancery appraisal case involving computer company Dell Inc. gave rise to a multitude of valuation measurements.  It is instructive to see how the court sorted through them in coming up with its final appraisal conclusion.  The case is In re Appraisal of Dell Inc., 2016 Del. Ch. LEXIS […] More...

Future Expected Investment Strategy Determines Value of FLP Interest

January 2016 | Issue 83 The estate of Helen P. Richmond held a 23.44% interest in Pearson Holding Co. (“PHC”), a family investment company.  The estate valued this holding at $3,150,000, later adjusted to $5,046,000.  The IRS valued it at $7,330,000.  This difference of opinion was aired in US Tax Court in a case called Estate […] More...

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Hempstead E-Letter
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NEW JERSEY COURT USES VALUATION DISCOUNT TO PUNISH “BAD BOY”
March 2017

Dell Appraisal Spawns a Multitude of Valuation Approaches
February 2017

Future Expected Investment Strategy Determines Value of FLP Interest
January 2016

Do Attached Strings Affect the Value of a Gift?
September 2015

Dodgy Fairness Opinion Earns Financial Advisor a Trip to the Woodshed
July 2015

Valuation Discounts Still in IRS Cross Hairs
June 2015

Court DCF Valuation of Ancestry.com Comes within a Whisker of Market Price
April 2015

Value Shift Turns Nest Egg into Goose Egg
March 2015

Arizona Beverages Partners Air Widely Divergent Value Views
December 2014

Personal Goodwill, is it Part of Company Value?
September 2014

Non-Recurring Cash Flows Complicate Hesco Valuation
July 2014

Judge Stands By His Deal Price Valuation
May 2014

Preferred Shareholders Prevail in Trados Transaction
April 2014

Tax Court Takes a New Valuation Line on Built-in Capital Gains
March 2014

Is a Member’s Interest Worth More Than an Assignee’s Interest?
February 2014

Judge Uses Deal Price to Value a Company
November 2013

Delaware Appraisal Case Becomes a “Battle of the Projections.”
October 2013

Value Can’t Go Below Zero in Virginia Divorce Case
July 2013

NJ Oppressed Shareholder Case Probes Key Valuation Issues
June 2013

Voting Control of LLC Shrinks Valuation Discount
May 2013

Discounted Stock Options are Deferred Compensation, Says Court
April 2013

Market Value Trumps Dodgy DCF in Verizon Case
March 2013

Incomplete Appraisal Report Dooms Charitable Deduction
February 2013

Marketability Discount Upheld in New York Fair Value Opinion
January 2013

Wandry Appeal Withdrawn by IRS
November 2012

Orchard Enterprises Case Provides Some Explicit Valuation Guidance
September 2012

Court Rules Out Cost Method For Valuing Technology
August 2012

Delaware Appraisal Finding is $6 Million Lower than the Merger Price
June 2012

The Wandry Taxpayers Found The Formula
April 2012

Courts Allow Reallocation of Gifted Shares
January 2012

Book Value was 2% of Fair Market Value in NJ Buyout Case
October 2011

Estate Tax Underpayment Penalty Waived in Giustina Case
September 2011

Estate of Gallagher is a Valuation Tutorial
August 2011

Delaware Chancery Court Ignores “Outlier” DCF Valuation
March 2011

Extraordinary Estate Planning Opportunities are Created by New Tax Act
March 2011

DCF Valuation Scuttled by Unsound Underlying Projection
January 2011

The Best Valuation Approach is Not Always DCF
December 2010

Tax Court Recognizes Full Valuation Discount for Capital Gains
September 2010

Family LLC Half-Interest Wins a 35% Valuation Discount
June 2010

Chancery Court Clears Up Two Valuation Issues
June 2010

IRS Valuation Win Upheld in Holman Appeal
May 2010

FLP Discounts Save Murphy Family $41 Million
February 2010

Middle Market Deal Valuations Held Steady in 2009
February 2010

DCF Valuation Trumps Market Price in American Home Mortgage Case
December 2009

Silicon Valley Venture Financings – Up Rounds Rallying
August 2009

Tax Court Splits on FLP Discounts
June 2009

Silicon Valley Venture Financing – Down Rounds Predominate
June 2009

Life Science Venture Financing – Down Rounds Are Up
April 2009

Goodwill Impairments Up Dramatically
April 2009

Goodwill Accounts for 47% of Average M & A Allocation
March 2009

Middle Market Deal Valuations Held Steady in Q4 2008
March 2009

Daubert Challenges of Financial Experts Up Sharply
February 2009

Built-In Gains Tax Measured Fully in Litchfield Case
February 2009

House Proposal Could Spell the End of Minority Valuation Discounts
January 2009

Divore Valuation Shaped by Estate Tax Valuation Principles
November 2008

Sequoia Slideshow is the Talk of the Life Sciences Venture Summit
November 2008

Is the Holman FLP Valuation Decision a Win for the IRS?
June 2008

Multi-Level Discounts Allowed in Gift Tax Valuation
May 2008

New Fairness Opinion Ruling Addresses Conflicts
March 2008

Daubert Challenges of Financial Experts up by 89%
January 2008

Jelke Decision Sets New Valuation Standard
November 2007

Estate of Jelke Reversal is a Major Win for Taxpayers
November 2007

IRS Extends §409A Compliance Deadline
October 2007

Revised Private Equity Valuation Guidelines Issued
June 2007

§409A Option Valuation Regulations Issued
May 2007

FLP Discount Nixed by Pennsylvania Court
May 2007

Discounted Stock Option Compliance Deadline Approaches
April 2007

IRS Issues Discount Guidance for Family Limited Partnerships
March 2007

Chancery Court Uses FAMA-French Model to Value Bank
February 2007

Market-Based Stock Option Valuations Receive SEC Blessing
February 2007

Tax Court Uses Dribble-Out Method to Value Restricted Stock
January 2007

Hempstead & Co. Offers Valuation CPE Course to CPAs
January 2007

IRS Defines Qualified Appraisal and Qualified Appraiser
October 2006

S-Corp Valuations Revisited by Tax Court
October 2006

FASB Issues New Statement on Fair Value
September 2006

IRS Redefines Gross Valuation Misstatement
September 2006

Taxpayers’ Appraiser Upheld by Fifth Circuit
September 2006

Appraisal Blunders Sink IRS in Major Estate Tax Case
July 2006

Taxpayer Wins 60% Gift Tax Valuation Discount
July 2006

Tax Court Says OK to 50% Valuation Discount
July 2006

Sub-S Corp Valuation Issues Addressed in Delaware Chancery Decision
June 2006

IRS Code §409A Necessitates Case in Setting Stock Option Exercise Prices
March 2006

Taxpayers’s LLC Valuation Produces Refund in Anderson Estate Tax Case
March 2006

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