Developing a fully informed plan to assist in managing the complex tax landscape
Tax minimization strategies often require valuations that meet specific criteria and can withstand scrutiny from internal and external auditors, regulators and taxing authorities. Having a full understanding of the impact of asset valuation is vital to the success of any tax planning strategy. We have the knowledge, experience and relationships to help you develop a fully informed plan to assist in managing the complex tax landscape and understanding how taxation authorities will view your strategy.
Our team works with hundreds of companies and conducts thousands of onsite visits each year in order to determine businesses' true property values. Our clients rely on our expertise and deep knowledge of their industry, business and property to provide effective valuation and advisory solutions to support their tax minimization strategies.
SOLUTIONS & RESOURCES
Property Tax Valuation & Advisory
Property tax laws differ from state to state and often vary by local jurisdiction, which makes keeping up with changes to property tax law an onerous task. In addition, many companies assume that one of their largest annual operating costs - property taxes, are fixed and unchangeable.
Yet, property taxes are based on the values of tangible assets and we often see assessed valuations that do not reflect current market trends. We have experience bringing valuation and jurisdictional knowledge to an assessment problem and achieving the desired outcome - reduced property taxes.
We accomplish client objectives through a strategic, effective process, which includes:
- Property tax valuation - valuation and testimony to support tax positions and protests
- Personal property tax consulting - assessment review and strategy assistance, which may include return and appeal filing and property tax audit support
- Real property tax advisory - assessment review to identify opportunities for cost reduction, such as quantifying obsolescence, duplication of real and personal property, clerical errors and lack of equity
Since a private company's stock prices are not public, proper 409A valuations are critical to avoid tax liabilities and penalties, both to the company as well as to the employees receiving the benefit. Without a 409A valuation, the company is responsible for defending its stock valuation. An accurate 409A valuation is essential for a company to ensure compliance with all federal tax laws, as well as to mitigate risk of litigation and audits.
By working closely with the "Big Four" accounting and auditing firms, as well as local regional firms, our team has a comprehensive understanding and can adapt to changing audit requirements and valuation best practices. Our team's strong accounting background ensures we provide accurate, audit-defensible reports for your valuation, protecting your company and allowing you to focus on what's important.
Stock Purchases Treated as Assets
Although the transaction is treated as an asset deal, a stock purchase can be difficult to properly value. Additionally, the buyer inherits all the target's liabilities. Proper valuation of intangible assets and liabilities can be complicated, but it is essential. Specifically, intangible assets obtained in a Section 338 election are considered intangible assets under IRC § 197, which requires that all assets be amortized over a 15-year period.
Additionally, IRC § 338 identifies seven general asset allocation classes:
- Cash and cash equivalents
- Actively traded personal property
- Accounts receivable, mortgages and credit card receivables that arise in the ordinary course of business
- Stock-in-trade of the taxpayer or other property of the kind that would properly be included in the inventory of the taxpayer if on-hand at the close of the tax year or property held by the taxpayer primarily for sale to customers in the ordinary course of business
- All assets not in other classes
- All IRC § 197 intangibles, except those in the nature of goodwill and going-concern value
- Goodwill and going-concern value
We have extensive experience with purchase price allocation valuations with Section 338 elections. If it is determined that a 338 election is needed, our team values all assets to ensure the acquisition price accurately reflects the assets acquired and that a company's financial and tax filings are compliant.