Transcription of Insights Winter 2010 52 - Willamette Management …
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Insights Winter 2010 52 - Willamette Management …
Insights Winter 2010 . 52. Gift and Estate Tax Valuation Insights The Combined Discount Robert P. Schweihs For a variety of reasons, the value of an ownership interest in a closely-held business enterprise may be subject to the application of a valuation discount. Valuation analysts often apply a combined discount to reflect one total value decrement related to both of two common valuation adjustments: (1) the discount for lack of ownership control (2) and the discount for lack of marketability. This discussion describes the theory and the rationale for the combined discount. And, this discussion points to recent empirical data that suggest that the combined discount may be larger than previously indicated. Introduction 1. blockage, related to the size of the subject minority ownership interest;. The value of a fractional interest investment in a business 2. restricted stock, related to SEC regulations or employ- enterprise is not necessarily equal to a pro rata percentage ment agreement provisions; and of the overall value of the entire enterprise.
Insights Winter 2010 52 thE combinEd discount Robert P. Schweihs Gift and Estate Tax Valuation Insights. For a variety of reasons, the value of an ownership interest in a closely-held business enterprise
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