Valuations of closely-held businesses and the Tax Court: are the discount percentages changing?

Article Abstract:

The Tax Court has been lowering the discount percentages for valuations of closely-held corporations' stock or partnership interests since 1954 for marketability and 1935 for minority interest discounts. Reports that the discounts are increasing are most likely due to the combining of minority interest and marketability discounts into a single percentage. The average minority interest discount is 23.5%, with a 25% average in 1935-1969 dropping to a 16.2% average in 1980-1990. Marketability discounts average 24% with a 29.9% average in 1954-1969 and a 19.5% average in 1980-1989.

Corporate Tax Reduction, Close corporations, Valuation, Closely held corporations

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Medical expenses expanded in 'Urbauer.' (Urbauer v. Commissioner) (tax deduction of medical expenses)

Article Abstract:

The Tax Court ruling in Urbauer v. Commissioner increased the types of expenditures that may be claimed as tax deductible medical expenses. The ruling involved the treatment of children with behavioral problems in special schools. Travel and telephone costs incurred during treatment, as well as tuition and allowance for the child, were deemed deductible medical expenses. Special schools are those that have available medical resources and are attended for the primary reason of medical treatment. Education must be 'incidental' to the students' receipt of medical care.

Medical care, Cost of, Health care costs

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Federal tax treatment of class action settlements under SEC Rule 10b-5: proper structuring can provide tax benefits to corporations

Article Abstract:

The author presents information useful to professionals involved in the tax aspects of SEC Rule 10b-5 class action settlements. Settlement agreements can be structured to minimize negative tax consequences. Form of settlement and timing issues are relevant. The origin of the claim doctrine is determinative of the treatment of damages as expense deductions under IRC section 162.

United States, Corporate Tax Deductions & Exemptions, Tax Management, Methods, Management, Class actions (Civil procedure), Compromise and settlement, Class action lawsuits, Settlements (Law), Tax accounting, Tax planning, Securities law

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