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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...

Do Attached Strings Affect the Value of a Gift?

October 2015 | Issue 82 Steinberg v. Commissioner, 145 T.C. No. 7 (Sept. 16, 2015) explores how a contingent liability accepted by a donee can impact the value of a gift for gift tax purposes. Introduction In 2007, Petitioner Jean Steinberg, age 89, entered into a net gift agreement under which she gave her four […] More...

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Estates Valuations

A major activity of Hempstead & Co. is preparing valuations for estate and gift tax and estate planning purposes.  The estate tax system of the US levies estate, gift and generation-skipping taxes on the basis of the fair market value of the assets in the estate.  When these assets include an interest in a closely-held business, it is necessary to prepare a valuation of the business interest in order to determine the tax due.

The business interest being valued can be a controlling interest in a corporation or partnership, or a minority interest. A properly-prepared appraisal report comprehensively addresses all of the relevant factors that go into determining value, including assets, liabilities, income and cash flow.  Hempstead & Co. carefully considers all elements relevant to the value, including the selection of the most appropriate valuation approach.  We also give careful consideration to the application of various valuation discounts for elements such as lack of marketability and lack of control.

We have extensive experience in providing valuation advice in the formation of family limited partnerships and similar vehicles, and have dealt widely with the special discount issues these valuations entail.