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In this installment on the marketability discount, we tackle the topic of marketability discounts and the income approach. The post is long and theoretical but the topic demands it.

In a tax environment where significant gifts need to be made and substantial value needs to be transferred, the topic of valuation discounts rises to the forefront. Valuation discounts are not magical or mysterious. They relate to differences between businesses at the level of the enterprise and interests in those businesses from the viewpoint of […]

The Basic Question The objective of many business appraisals is to determine a valuation conclusion at the nonmarketable minority level of value. We saw in the first post in this series on discounts for lack of marketability that the marketability discount is a conceptual discount that moves value from an enterprise level to a shareholder […]

  A New Series  During the 2012 calendar year, individuals can gift, or give away, as much as $5.12 million and pay no federal gift taxes on the gifts, although this amount is reduced by the amount of any taxable gifts made in prior years. In the absence of a Congressional change in the law, […]

Estate of Shurtz (T.C. Memo 2010-21) was filed in February 2010, or almost two years ago. On February 24, 2010, the BV Wire, published by Business Valuation Resources, reported on the case in a short article entitled “Mercer Capital (and QMDM) wins discounts in new FLP case.” Background According to the decision, written by Judge Jacobs, […]

The following question arrived through LinkedIn the other day: I read today in e-article that there’s is a Mercer Model for Pass Through Entities? We have almost every book you’ve written but were unable to find it. I called Mercer Capital and talked to Lisa, she said there is no such model.. I am aware […]

In June 2010, I participated in the video interview series “Conversations with the Masters,” hosted by Brien K. Jones of the National Association of Certified Valuation Analysts (NACVA). In the first part of the interview, filmed at the NACVA/IBA Annual Consultants’ Conference in Miami, Brien and I discuss the growing influence of LinkedIn and how […]

Rand Curtiss wrote about the QMDM in a recent IBA blog post. If you currently use the QMDM, you will appreciate his insights into the expected holding period. He also suggests alternative ways to use the model to help support or give confidence in marketability discount indications from other methods.