How corporate-level capital gains taxes affect fair market value

Article Abstract:

Built-in corporate capital gains tax liabilities do effect the fair market value of close corporations, despite the reluctance of the Tax Court to admit as much. With the repeal of the General Utilities doctrine, the IRS claimed that such taxes should be treated as having no effect on the corporation's stock. Such tax liabilities do reduce the value of many corporations, however, even if the effects of the tax are seen only in speculative scenarios involving liquidation.

United States, Economic aspects, Cases, Transfer taxes, Close corporations, Valuation, Closely held corporations, Capital gains tax, General Utilities doctrine (Taxation)

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Liquidity planning for shareholders of public corporations

Article Abstract:

Estate planning is especially necessary for a shareholder who owns large amounts of publicly traded stock. The shareholder needs enough liquidity to pay estate taxes and may have a problem due to the federal securities laws' restrictions on stock sales and to the 'blockage' effect. Different liquidity techniques may be suitable depending on whether the shareholder wants to pass the stock on intact to another person.

Methods, Estate planning, Liquidity (Finance)

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