Tax Aspects of Valuation and Net Income

• Author: Brian C. Vertz and Mitchell E. Benson
• Pages: 151-192

TAX ASPECTS OF

VALUATION,

NET INCOME

6-1

CHAPTER 6

TAX ASPECTS OF VALUATION

AND NET INCOME

§6. TAX ASPECTS OF VALUATION AND NET INCOME

§6.1 GENERAL BACKGROUND

§6.1.1 Def‌initions

§6.1.1.1 Asset Approach

§6.1.1.2 Average Tax Rate

§6.1.1.3 Fair Market Value

§6.1.1.3.1 Assumptions

§6.1.1.4 Income Approach

§6.1.1.5 Marginal Tax Rate

§6.1.1.6 Market Approach

§6.2 BUSINESS VALUATION

§6.2.1 Income Approach

§6.2.1.1 Capitalization Rate

§6.2.1.2 Tax-Affecting S corporation

§6.2.1.3 Reasonable Compensation

§6.2.1.4 Effect of TCJA and CARES Act

§6.2.1.5 Effect of CARES Act

§6.2.2 Market Approach

§6.2.2.1 Effect of TCJA

§6.2.3 Data Matching

§6.2.4 Valuation Date

§6.2.5 Adaptation

§6.2.6 Asset Approach

§6.2.7 Valuation Discounts

§6.2.7.1 Minority Interest (Lack of Control) Discounts

§6.2.7.2 Marketability Discounts

§6.2.8 Tax Court Decisions that Affect Business Valuation

§6.2.8.1 Love v. Commissioner, T.C. Memo. 1989-470

§6.2.8.2 Menard v. Commissioner, 560 F.3d 620 (7th Cir. 2009)

§6.2.8.3 Gallagher v. Commissioner, T.C. Memo 2011-148

§6.3 VALUATION OF RETIREMENT ASSETS

§6.3.1 Def‌ined Benef‌it Plan Valuation

§6.3.2 Def‌ined Contribution Plan Valuation

TAX ASPECTS OF

VALUATION,

NET INCOME

Divorce Taxation 6-2

§6.4 NET INCOME FOR SUPPORT AND ALIMONY DETERMINATIONS

§6.4.1 Detecting Income Sources in Tax and Business Documents

§6.4.1.1 Individual Income Tax Returns

§6.4.1.2 Business Tax Returns

§6.4.1.3 Estate and Gift Tax Returns

§6.5 ADDITIONAL TCJA MODIFICATIONS TO VALUATION

§6.5.1 Tax Affecting C Corporations

§6.5.2 §199A Pass-Through Income Deduction

§6.5.2.1 Internal Revenue Code §199A

§6.5.2.2 Qualif‌ied Business

§6.5.2.3 Multiple Businesses and Owners

§6.5.2.4 Up to 20% of Qualif‌ied Business Income (QBI)

§6.5.2.5 W-2 And Capital Investments Tests

§6.5.2.6 Specif‌ied Services Businesses

§6.5.2.7 Negative Qualif‌ied Business Income

§6.5.3 Business Meals and Entertainment Expense

§6.5.3.1 Entertainment Expenses

§6.5.3.2 Business Meals

§6.5.3.3 Employee Parking and Transportation

§6.5.4 Depreciation

§6.5.4.1 Section 179 Accelerated Depreciation

§6.5.4.1.1 Married Taxpayers

§6.5.4.2 First Year Bonus Depreciation—I.R.C. §168(k)

§6.5.4.2.1 Property Eligible for Bonus Depreciation

§6.5.4.2.2 Property Not Eligible for Bonus Depreciation

§6.6 THE PAYCHECK PROTECTION PROGRAM (PPP)

§6.7 OTHER CARES ACT PROVISIONS

§6.7.1 Delay of Payment of Employer Payroll Taxes

§6.7.2 Economic Injury Disaster Loans (EIDL)

§6.7.3 Delay of Certain Deadlines for Tax Years 2019 and 2020

§6.7.4 Other Grants from State and Local Governments

§6.7.5 Employee Retention Credits

§6.8 RESTAURANT REVITALIZATION FUND

§6.9 TAX ASPECTS OF VALUATION AND DIVISION OF COMMERCIAL REAL ESTATE

§6.9.1 Commercial Real Estate Valuation Terms

§6.9.2 Tax Implications of Debt

§6.9.3 Division Considerations

TAX ASPECTS OF

VALUATION,

NET INCOME

6-3 Tax Aspects of Valuation and Net Income §6.1

§6. TAX ASPECTS OF VALUATION AND NET INCOME

§6.1 GENERAL BACKGROUND

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