Divorce Forensic CPA as a Mediator

The process of divorce can be complex and expensive. After so many years together, choosing to part ways is complicated when dividing a house once owned separately (and now owned jointly) and a business owned before marriage that appreciated during your lives as husband and wife. When divorce is imminent (or contemplated), the first thing…

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Taxation on Property Transfers (IRC §1041)

The transfer of property that is not a gift is generally a taxable event requiring the transferor to recognize a gain or loss on the difference between its fair market value and adjusted basis. Prior to 1984, tax regulations required that appreciated property transferred to a non-transferor (receiving) spouse incident to a divorce result in…

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Intangible Assets (2 of 2)

In the first intangible assets article, we discussed the “economic phenomena” of intangible assets and the tests for its economic value and legal existence. These tests, if passed, may indicate the existence of identifiable intangible assets. Intangible assets have two general categories: real and personal property. Intangible real property includes fractional ownership interests in real…

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Law Practice Valuation

The value of a business is usually the present value of its expected future earnings. Price is what you negotiate. Value and price, therefore, are not always identical (as evidenced by the differences between asking and selling prices). Time and timing, for instance, are factors affecting price. It takes time to sell a business and…

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Royalties

Royalties for licensing intellectual property (IP) such as patents and trademarks are paid to licensors by licensees. The licensors, among other reasons, enter into licensing agreements when they do not have the capital to commercially exploit their patents. In exchange for licensors substantially conveying the rights to their patent, the licensees usually agree to exclusively…

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Bankruptcy Risk Planning: The Z-Score

Bankruptcy occurs when a company is unable to meet maturing financial obligations and petitions a Federal court either for liquidation (Chapter 7) of its assets or reorganization (Chapter 11) of its debts. A company generally receives debt relief in Federal court if it is unable to liquidate its debts as they come due by transferring its assets…

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Family Law: Understanding the Hypothetical Seller and Buyer

FACT: The emotions of spouses involved in a divorce often obscure the value of a company (or ownership interest), one of their most important marital assets. The spouse keeping the company (in-spouse) often argues that the company is less valuable. On the other hand, the spouse leaving the company behind (out-spouse) often argues that the…

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