Generally, most companies understand what a 409A Valuation is and why they need it, but questions commonly arise regarding the timing and subsequent updates of their 409A Valuation. Not all of these questions have clear cut answers and ASL prides itself in helping our clients navigate these “gray areas” of 409A Valuations.
Upcoming tax regulation changes may have sweeping effects on how family-owned entities are valued.
Initially, the IRS did not allow discounts for lack of control in valuing family-owned interests. In 1993, the IRS ruled that these interests were not collective and therefore lifted the limitation for this discount. However, there are still some situations where discounts for lack of marketability and lack of control are challenged on the basis of IRS Code §2704.
Jeff Faust, Director of Valuation Services, here at ASL, spoke at the ASL Emerging Business Group’s best practices seminar on, “How to Value Your Emerging Business”. In this podcast, Jeff shares his expertise on how to understand the value of your emerging business.