Purchase Price Allocations
ValueScope analysts are experts in all facets of tax appraisal, from gift and estate valuations to complex international transfer pricing. Our valuation teams have extensive, in depth experience in every major industry and national and international taxing authorities.
For any entity that opts to negotiate, appeal or litigate its tax assessment, our experience is an invaluable asset.
Similar to financial reporting requirements, the identification and quantification of underlying assets can have a material impact on the economics of a transaction. We bring clarity and understanding of each material asset through our analyses.
Estate and Gift Tax Appraisals
Having supported estate and gift tax matters for three decades, ValueScope’s team of experts have performed thousands of valuations of almost every conceivable security interest, addressing issues from tax attributes to discounts. We’ve defended our work in US Tax Court and Federal District Court – at times under intense scrutiny. That gives us a distinct advantage in understanding how to approach valuations to avoid disputes.
As the federal government’s “go-to” firm on economic substance, ValueScope invented the model for assessing the ex-ante and ex-post performance of alternative investments, relative to the claimed tax attributes.
We use market-based pricing techniques, benchmarking studies and other accepted valuation methodologies to incorporate inter-company pricing policies supported by established valuation theory, regulations and well-established economic principles. The end result is a sound appraisal for transfer pricing solutions that meets both clients’ business objectives and the arm’s length requirements imposed by national tax authorities. Our valuation reports are prepared in conformance with the Uniform Standards of Appraisal Practice (“USPAP”) and applicable Treasury Department Guidelines.
IRC 409A Stock Valuations
IRC §409A Stock Valuations for equity-based stock grants as compensation have an impact on corporations and their employees. Sometimes combined with compensation studies, accurate valuations can have significant tax and economic consequences.
Other Federal and State Income Tax Services
A variety of other valuations are triggered by taxable events, including reasonable compensation, built-in capital gains, C- to S-Corporation conversions, excess accumulation of earnings, in-process R&D and state transfer pricing matters. ValueScope professionals have extensive expertise in tax reporting matters on the municipal, state, federal and international level.
Examples of our work:
Our team completed a transfer pricing study between corporate entities related to the expansion of domestic subsidiary activity for a research-driven brokerage company. This included a thorough analysis of both U.S. Transfer Pricing Regulations (Sec. 482) and the OECD Model Tax Convention, which is also the basis for OECD Transfer Pricing Guidelines. We developed arm’s-length pricing and revenue allocation for various inter-company services through economic and functional analyses conducted using the best method rule.
INCOME TAX MATTER
ValueScope was retained to develop a fair value analysis for five family employees of a corporation in order to validate their taxable income reported for the C-Corporation. Multiple analyses were developed based on available surveys, independent research and statistical relationships.
The U.S. Treasury Department and Department of Justice asked us to determine whether economic substance was established in numerous transactions involving a foreign distressed consumer debt business. In every case where we assisted, the government prevailed and maximum penalties were handed down.