PORTLAND, Ore., April 23, 2015 /PRNewswire/ -- While there are no easy answers to valuing pass-through entities, new guidance based on years of research is finally here. The new guide Taxes and Value: The Ongoing Research and Analysis Relating to the S Corporation Valuation Puzzle" written by Nancy Fannon and Keith Sellers and published by Business Valuation Resources, brings together dense and thorough academic research with new direction on how to value S corporations. This resource provides the framework to move the business valuation profession forward in solving the puzzle of how taxes affect the value of an S corporation in comparison to a C corporation.
In this highly anticipated resource, authors Fannon and Sellers present the findings of decades of academic research on the impact of taxes on firm value and demonstrate that historical market returns impound the effects of shareholder taxes. They also suggest a new, more direct approach to pass-through entity valuation that challenges traditional notions about the differences in value between an S corporation and the public-market C corporation.
A C corporation is taxed at the corporate level for federal income tax purposes and shareholders are taxed on any capital gains realized by the shareholder and on any dividend income distributed from the C corporation. In contrast, shareholders of an S corporation only pay one level of federal income tax because the S corporation will pass-through all of its income and its losses to the shareholders.
"BVR is honored and thrilled to be publishing this groundbreaking work on this hotly debated topic. Nancy Fannon and Keith Sellers have delivered welcome thought leadership that will inform thinking about shareholder taxes for years to come," said Lucretia Lyons, President of BVR. "Taxes and Value is an invaluable contribution to the existing body of knowledge – and to the ongoing discussion and debate around S corporation taxes."
Important chapters in this guide include:
The Importance of Matching the Cost of Capital With the Income Stream
An Explanation of the Implications of Shareholder Taxes on the Corporate Cost of Capital
Literature Review: Research on the Effect of Taxes Embedded in the Cost of Capital
Impact of Prior Research on Private-Company Valuation
Research Related to the Magnitude of Taxes Embedded in the Cost of Capital
An Alternative Approach to the Valuation of Pass-Through Entities
Evolution of Pass-Through Entity Valuation
Court Case Digests that Address Pass-Through Entity Issues
Top business valuation firms depend on BVR for authoritative market data, continuing professional education, and expert opinion. Our customers include business appraisers, certified public accountants, M&A professionals, business brokers, lawyers and judges, private equity funds and venture capitalists, owners, and CFOs, among others. For more information, please visit www.bvresources.com.
About Nancy Fannon
Nancy J. Fannon, CPA, ASA, MCBA, ABV, is the partner in charge of litigation services for Meyers, Harrison & Pia LLC. With over 25 years of valuation experience as an appraiser and expert witness, Nancy has lectured extensively on valuation and damages and is an author and technical reviewer on many valuation textbooks and journals. The third edition of her most recent publication, The Comprehensive Guide to Lost Profits and Other Commercial Damages was published in 2014.
About Keith Sellers
Keith F. Sellers is an associate professor in the School of Accountancy at the Daniels College of Business at the University of Denver. An experienced business valuation consultant, he is also cofounder of a consulting and software development company that specializes in the valuation of employee stock options, warrants, convertible equity securities, and other derivative financial instruments.
Contact: Sarah Andersen, Publisher Business Valuation Resources, LLC 1000 SW Broadway, Suite 1200 Portland, Oregon 97205 Phone: (503) 291-7963 ext. 123 Email: [email protected]