#business-valuation
Business Valuation
Methods and best practices for determining the fair market value of a business
Family Limited Partnership Valuation Discounts in 2026: How Wealthy Families Quietly Shave 25–40% Off Estate and Gift Tax Bills
A practical 2026 guide to Family Limited Partnership valuation discounts — how high-net-worth families combine 10–25% lack-of-control and 20–35% lack-of-marketability discounts to cut estate and gift tax exposure, with worked numerical examples, the IRC Section 2036 traps that have collapsed estates in Tax Court, setup costs, and the bookkeeping required to defend the structure on audit.
The IDGT Installment Sale Playbook: Freezing Estate Value, Burning Through Income Taxes, and Surviving Rev. Rul. 2023-2
How the Intentionally Defective Grantor Trust (IDGT) installment sale freezes estate value at today's AFR, why Revenue Ruling 2023-2 ended the basis-step-up shortcut for grantor trust assets, and the formalities that decide audit outcomes.
ASC 350 Goodwill Impairment: A Private Company Guide to the Amortization Alternative and Triggering-Event Testing
ASC 350 lets private companies amortize goodwill over up to ten years and test for impairment only when a triggering event occurs. This guide walks through ASU 2014-02 and 2021-03 elections, the single-step Step One quantitative test after ASU 2017-04, and how to keep auditors and lenders aligned.
Customer Concentration Risk: The 10% Rule That Quietly Drains Valuation, Credit, and Leverage
Customer concentration above 10% triggers GAAP disclosure, and concentrations above 30% can knock 20–35% off a sale price and shrink bank advance rates. Where the danger thresholds sit, how lenders and acquirers price the risk, and how to diversify revenue before it costs you.
Earnouts in M&A: Bridging the Valuation Gap Without Walking Into a Lawsuit
About one third of 2024 private-target M&A deals included an earnout, and median earnout potential rose to roughly 43% of the closing payment. This guide explains contingent purchase price structure, Section 453 installment-sale tax mechanics, the compensation-versus-purchase-price trap, and the recurring drafting mistakes behind six of the last seven major Delaware decisions favoring sellers.
Valuing a Closely-Held Business: Asset, Income, and Market Approaches for Exits, Buyouts, and Estate Transfers
Three valuation approaches — asset, income, and market — can produce 50% differences in indicated value for the same closely-held business. This guide explains when each fits, how DLOM and DLOC discounts apply, and what records owners need before a sale, partner buyout, or estate transfer.
Section 6166 Estate Tax Deferral for Closely-Held Businesses: The 14-Year Installment Election in 2026
How executors of closely-held business estates use IRC Section 6166 to defer federal estate tax across 14 years at a 2% rate, with the 2026 inflation-adjusted $1.94M base, the 35% eligibility test, election mechanics, and the acceleration events that kill the deferral.
409A Valuations: A Founder's Guide to Stock Option Strike Prices and Safe Harbors
A 409A valuation is the IRS-recognized appraisal that sets the strike price on every option grant. Without one, founders risk 20% federal excise penalties, premium interest, and California's 5% piggyback tax — all falling on the employee.
Cap Table Management for Startups: A Practical Guide from Seed to Exit
A practical guide to managing a startup cap table from incorporation to exit — covering SAFEs, priced rounds, option pool sizing, 409A valuations, vesting mechanics, dilution math, and the diligence-ready habits that prevent costly equity surprises.
Business Valuation: How to Determine What Your Company Is Worth
Learn how to determine what your business is worth using the four main valuation methods: asset-based, earnings multiple (SDE/EBITDA), market-based, and discounted cash flow. Includes formulas, industry multiples, and tips to increase your company's value.
Business Succession Planning: A Complete Guide for Small Business Owners
Learn how to create a business succession plan that protects your legacy. Covers the five main succession options, buy-sell agreements, business valuation, tax planning, and a step-by-step timeline for small business owners.
EBITDA: What It Is, How to Calculate It, and Why Your Business Needs It
Learn what EBITDA is, how to calculate it with step-by-step examples, and why this key financial metric matters for business valuation, investor comparisons, and operational performance analysis.