{"product_id":"valuing-pass-through-entities-isbn-9781118848661","title":"Valuing Pass-Through Entities","description":"\u003cp\u003e\u003cb\u003eThe clarity and guidance valuation analysts have been thirsting for\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe business appraisal community regularly names the valuation of pass-through entities as a major issue of concern. Courts, appraisers, and the IRS have long been at odds on the topic, and the contention within the appraisal community itself over methods and inputs further complicates the issue. \u003ci\u003eValuing Pass-Through Entities\u003c\/i\u003e provides clarity for the analyst tasked with valuation, offering clear explanations of the different perspectives and approaches to the process.\u003c\/p\u003e \u003cp\u003e\u003ci\u003eValuing Pass-Through Entities\u003c\/i\u003e cuts through the chatter to:\u003c\/p\u003e \u003cul\u003e \u003cli\u003eExplain the advantages and limitations of different types of pass-through entities\u003c\/li\u003e \u003c\/ul\u003e \u003cul\u003e \u003cli\u003eAnalyze the different viewpoints currently dividing the appraisal community\u003c\/li\u003e \u003cli\u003eGain a fresh perspective on landmark cases\u003c\/li\u003e \u003cli\u003eExplain how to properly utilize a court-tested model\u003c\/li\u003e \u003cli\u003eExamine detailed sensitivity analyses of different inputs under the income and market approaches\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eThe book includes illustrative examples, templates, and a useful technical supplement, plus case studies that demonstrate the real-world effects of various pass-through entity valuation methods and inputs. Detailed analyses and an easy-to-apply model simplify the process while positively affecting outcomes.  The companion website provides the text of landmark court decisions, a blog featuring industry trends and tidbits, additional articles, and the insight of the author and other industry leaders.\u003c\/p\u003e \u003cp\u003eValuation requires the successful juggling of multiple variables, many of which can have a major impact on value. Analysts need to know how to balance each factor and apply the appropriate rates and discounts, but a lack of standard practice often leaves the issue too subjective. \u003ci\u003eValuing Pass-Through Entities\u003c\/i\u003e clears the air, providing real-world guidelines and tools.\u003c\/p\u003e \u003cp\u003eForeword xi\u003c\/p\u003e \u003cp\u003ePreface xiii\u003c\/p\u003e \u003cp\u003eAcknowledgments xv\u003c\/p\u003e \u003cp\u003eAbout the Author xvii\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 1 \u003c\/b\u003e\u003cb\u003eIntroduction 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eDefinition of Value 2\u003c\/p\u003e \u003cp\u003eBeauty and Value 2\u003c\/p\u003e \u003cp\u003ePremise of Value 4\u003c\/p\u003e \u003cp\u003eApproaches to Value 5\u003c\/p\u003e \u003cp\u003eThe PTE Conundrum 7\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 2 \u003c\/b\u003e\u003cb\u003eThe History of Federal Statutory Tax Rates in Maximum Income Brackets and the Evolution of Different Forms of Business Entities 11\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOrigins of the United States Internal Revenue Code 13\u003c\/p\u003e \u003cp\u003eYears 1913 Through 1938 14\u003c\/p\u003e \u003cp\u003eYears 1939 Through 1953 19\u003c\/p\u003e \u003cp\u003eYears 1954 Through 1985 22\u003c\/p\u003e \u003cp\u003eS Corporations 23\u003c\/p\u003e \u003cp\u003eTax on Unreasonable Compensation 27\u003c\/p\u003e \u003cp\u003eGeneral Utilities Doctrine 28\u003c\/p\u003e \u003cp\u003eYears 1986 Through 2013 29\u003c\/p\u003e \u003cp\u003eLimited Liability Companies 30\u003c\/p\u003e \u003cp\u003eSummary 32\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 3 \u003c\/b\u003e\u003cb\u003eEffective Federal Individual and Corporation Income Tax Rates 41\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eEffective Federal Income Taxes on $10,000 of 2012 CPI Adjusted Taxable Income, 1913–2013 42\u003c\/p\u003e \u003cp\u003eEffective Federal Income Taxes on $100,000 of 2012 CPI Adjusted Taxable Income, 1913–2013 51\u003c\/p\u003e \u003cp\u003eEffective Federal Income Taxes on $1 Million of 2012 CPI Adjusted Taxable Income, 1913–2013 57\u003c\/p\u003e \u003cp\u003eSummary 67\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 4 \u003c\/b\u003e\u003cb\u003eComparison of Different Entity Forms 71\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBusiness Life Cycle 71\u003c\/p\u003e \u003cp\u003eBenefits and Limitations of PTEs 75\u003c\/p\u003e \u003cp\u003eFinancial Statements of C Corporations and PTEs 76\u003c\/p\u003e \u003cp\u003ePTE Status and Bank Financing 78\u003c\/p\u003e \u003cp\u003ePrevalence of PTEs 79\u003c\/p\u003e \u003cp\u003eChange in Form of Entity 81\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 5 \u003c\/b\u003e\u003cb\u003eIncome Approach and Value to the Holder 85\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eValue to the Holder versus Value to the Buyer 86\u003c\/p\u003e \u003cp\u003eJurisdictional Issues 87\u003c\/p\u003e \u003cp\u003eDelaware Open MRI Radiology Associates, P.A. v. Howard B. Kessler 87\u003c\/p\u003e \u003cp\u003eBernier v. Bernier 92\u003c\/p\u003e \u003cp\u003eLimitations of Delaware Open MRI and Bernier 93\u003c\/p\u003e \u003cp\u003eThe Modified Delaware MRI Model 94\u003c\/p\u003e \u003cp\u003eFlexibility of the MDMM 98\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 6 \u003c\/b\u003e\u003cb\u003eInputs to Modified Delaware MRI Model 101\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eNormalized Pretax Income 101\u003c\/p\u003e \u003cp\u003eEntity-Level Income Taxes on Pass-Through Earnings 103\u003c\/p\u003e \u003cp\u003eIncome Retained in the Business 104\u003c\/p\u003e \u003cp\u003eEffective Federal and State Income Tax Rates on Pass-Through Income 107\u003c\/p\u003e \u003cp\u003eDividend Tax Rates 111\u003c\/p\u003e \u003cp\u003eSummary 121\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 7 \u003c\/b\u003e\u003cb\u003eIncome Approach and Investment Value 123\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMeasuring Investment Value 124\u003c\/p\u003e \u003cp\u003eDeal Structure 126\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 8 \u003c\/b\u003e\u003cb\u003eIncome Approach and Fair Market Value 131\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCharacteristics of FMV 131\u003c\/p\u003e \u003cp\u003eDetermining FMV 134\u003c\/p\u003e \u003cp\u003eExample of Failing to Consider Floor and Ceiling Values 135\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 9 \u003c\/b\u003e\u003cb\u003eFair Market Value Court Decisions 139\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eNumber of Federal Estate and Gift Tax Returns 140\u003c\/p\u003e \u003cp\u003eGross v. Commissioner 141\u003c\/p\u003e \u003cp\u003eEstate of Heck v. Commissioner 145\u003c\/p\u003e \u003cp\u003eWall v. Commissioner 146\u003c\/p\u003e \u003cp\u003eEstate of Adams v. Commissioner 149\u003c\/p\u003e \u003cp\u003eRobert Dallas v. Commissioner 151\u003c\/p\u003e \u003cp\u003eGallagher v. Commissioner 153\u003c\/p\u003e \u003cp\u003eAnalysis of Cases 154\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 10 \u003c\/b\u003e\u003cb\u003eThe Market Approach 157\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRevenue Ruling 59–60 157\u003c\/p\u003e \u003cp\u003eAppraisal Standards Board Standards 159\u003c\/p\u003e \u003cp\u003eAICPA Statement on Standards for Valuation Services 160\u003c\/p\u003e \u003cp\u003eGuideline Public Company Method 161\u003c\/p\u003e \u003cp\u003eGuideline Public Company Method and PTE Value to the Holder 163\u003c\/p\u003e \u003cp\u003eGuideline Public Company Method and PTE Investment Value 168\u003c\/p\u003e \u003cp\u003eGuideline Public Company Method and PTE Fair Market Value 169\u003c\/p\u003e \u003cp\u003eGuideline TransactionsMethod 171\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 11 \u003c\/b\u003e\u003cb\u003eIndividual State Income Taxes 175\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStatutory Individual State Income Tax Rates 175\u003c\/p\u003e \u003cp\u003eEffective Individual State Income Tax Rates 176\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 12 \u003c\/b\u003e\u003cb\u003eDiscounts, Premiums, Bylaws, and State Laws 181\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePTE Agreements 181\u003c\/p\u003e \u003cp\u003eState Law 183\u003c\/p\u003e \u003cp\u003eNevada Senate Bill 350 183\u003c\/p\u003e \u003cp\u003e\u003cb\u003eCHAPTER 13 \u003c\/b\u003e\u003cb\u003eValuing Complex PTE Ownership Interests 187\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eReasons for Complex Capital Structures 187\u003c\/p\u003e \u003cp\u003eOption-Pricing Method 188\u003c\/p\u003e \u003cp\u003eExample 1: Preferred-Member Units 190\u003c\/p\u003e \u003cp\u003eExample 2: Joint Venture 193\u003c\/p\u003e \u003cp\u003eExample 3: S Corporation with Unreasonable Officer\/Stockholder Compensation 196\u003c\/p\u003e \u003cp\u003eAppendix A: Checklist 199\u003c\/p\u003e \u003cp\u003eAppendix B: Case Study: Bob's Cruises 215\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eERIC J. BARR \u003c\/b\u003eis a founder and comanaging member of Fischer Barr \u0026amp; Wissinger LLC and is the Director of the firm’s Business Valuation and Accounting and Assurance Services departments. Barr is a nationally sought-after thought leader, lecturer, and webinar presenter on accounting, forensic, and valuation matters.   \u003c\/p\u003e\u003cp\u003eObtaining a clear grasp of pass-through entities has proven to be challenging to many valuation professionals. In \u003ci\u003eValuing Pass-Through Entities\u003c\/i\u003e, Eric Barr—a recognized expert in the field—takes the handling of pass-through entities to new heights of clarity and understanding. Step by step, Barr walks professionals through the byzantine nuances of valuing pass-through entities. \u003c\/p\u003e\u003cp\u003e\u003ci\u003eValuing Pass-Through Entities\u003c\/i\u003e offers valuation professionals a much-needed resource that provides a clear explanation of the different perspectives and approaches to the valuation process. Barr includes detailed analysis and offers an easy-to-apply model that simplifies a process that will yield positive outcomes. \u003c\/p\u003e\u003cp\u003eThis groundbreaking book is filled with illustrative examples, templates, and a technical supplement. In addition, \u003ci\u003eValuing Pass-Through Entities\u003c\/i\u003e contains a wealth of case studies that demonstrate the real-world effects of various valuation methods. From insights on the federal tax structure to changes in individual income tax rates, the author explores rational business behavior and how such behavior is influenced by the overall tax system. Barr also outlines a proven framework and structure that allows the valuation professional to address what the author terms the \u003ci\u003ePTE conundrum.\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003eDesigned to be a practical tool, the book’s companion website provides additional cases and information, including a blog featuring industry trends and tidbits, additional articles, and the insight of the author and other industry leaders. \u003c\/p\u003e\u003cp\u003eValuation requires the successful juggling of multiple variables, each of which can potentially have a major impact on value. Savvy analysts need to know how to balance each factor and apply the appropriate rates and discounts, but a lack of standard practice often leaves the issue too subjective. \u003ci\u003eValuing Pass-Through Entities \u003c\/i\u003eclears the air, providing real-world guidelines and tools.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990446391525,"sku":"NP9781118848661","price":95.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118848661.jpg?v=1761787864","url":"https:\/\/k12savings.com\/products\/valuing-pass-through-entities-isbn-9781118848661","provider":"K12savings","version":"1.0","type":"link"}