Reasonable Compensation in Corporations and Discount for Lack of Marketability and the IRS

Wednesday, March 26, 2014
Two Technical Sessions Will Be Offered to Empire Employees.  These are reasonable compensation in corporations and how to address discount for lack of marketability and the IRS.
Reasonable Compensation in Corporations
Background and key legal cases introduce the topic looking at the seven primary sources of compensation. The market, income and cost approaches to determine reasonable compensation are explored.  The five major questions associated with reasonable compensation analysis are introduced and answered.   Finally other compensation issues with a look at debt from owners and debt forgiveness are explored to help the practitioner think more broadly about questions to ask owners and key individuals relating to reasonable compensation in privately held corporations. 
How to Address Discount for Lack of Marketability and the IRS 
This session will initially explore the background and the IRS publication “Discount for Lack of Marketability – Job Aid for IRS Valuators” published by the IRS August 22, 2011 with an update on additional sources, and methods for consideration when developing a DLOM.  The updating commentary includes critique feedback from various modelers from the IRS publication and comments from Discounts for Lack of Marketability and the IRS (October 2013) This presentation emphasizes what you need to do for IRS purposes regarding DLOMs and how to work with the IRS if your business valuation report is audited.   Example report language and questions to be answered in a DLOM commentary are presented to assist the practitioner.
Empire Valuations
New York, New York