Discount for Lack of Marketability and the IRS

With this information business appraisers can take the information provided in this book, obtain data, and apply models that reflect current best practices.

As the champion of the Discount for Lack of Marketability Job Aid for IRS Professionals while at the IRS, Mike was not allowed to contact the various authors of models critiqued in this publication. It was prepared in September 2009 and published by the IRS in August 2011.

IRS Counsel had indicated that contacting only the modelers in the Job Aid, while not contacting others could be perceived as favoritism by some. In this book, Mike has contacted the major modelers presented in the Job Aid and asked them to critique the IRS commentary as well as to provide their comments.

In addition, as a reviewer of scores of Discount for Lack of Marketability analysis for expert witnesses Mike provides insights and offers recommendations regarding the application of these models. With this information business appraisers can take the information provided in this book, obtain data, and apply models that reflect current best practices.

Table of Contents

A. Executive Summary

B. Introduction

C. General Marketability Discount Information:

     Marketability Defined, Factors Influencing Marketability Identified, Willing Seller  Considerations, Marketability of Minority vs. Conrtolling Interests, Sample Initial Information Document Request  Items on Marketability

D. Summary of Approaches to DLOM

     Benchmark Approaches (6 presented), Securities-Based Approaches (4 presented),  Analytical Approaches (4 presented), Other Approaches (5 presented)

E. Evaluation and Recommendations

     Approaching Marketability as a Reviewer, Approaching Marketability as a Valuer, Dealing with Marketability Discount in a Report Review Under Certain Specific Situations, Sources Available to IRS Valuation Specialists

F. Summary and Conclusions

     Evaluation and Recommendations, Webinar Follow Up, Personal Recommendations, Practical Pointers, Endnotes (IRS Job Aid), Endnotes (Author Commentary), Books by Michael A. Gregory