Exeter Business Valuations

Business Valuation Services

What's Your Business Really Worth?

Business owners and executives frequently make best-guess business valuation estimates of their business's or asset's value based on rule of thumb...book value...or an old appraisal report. Relying on these informal outdated measures of business valuation can lead to inaccurate values and costly mistakes. They may over look intangible values and/or discounts.

Whether you are selling or buying a business, planning your estate or settling a contract dispute, involved in a divorce or no court divorce, or eminent domain proceeding, it is critical to have a sound, professional certified business valuations from a firm that will stand behind its conclusions.

Lenders, insurers, the courts, and government agencies are increasingly insisting on expert business valuations to support claims where value is concerned.

I specialize in working with individuals and owner-operated businesses. As a Certified Public Accountant, I understand the unique financial management and tax needs you face. As a business advisor, I offer you a comprehensive scope of services. My professional approach combines tax, financing, business valuation, systems, financial management and accounting and auditing expertise. This approach, combined with dedication to quality, provides an exceptional level of credibility to the valuations.

Integrity

Independence

Some attorneys try to influence the Valuator to benefit their client. Mr. Exeter does not let them influence him. His opinion is based on the facts of the case and taking into consideration the rules of the business valuation associations, court cases and the rules of the Internal Revenue Service. Mr. Exeter does all the work himself, because it is easier to understand the business or profession. He can understand any risk and what discounts or premiums are appropriate. He does not rely on statistics of other companies that he knows nothing about. The statistics are usually two or three years old. Mr. Exeter prefers to use current information. When there are partial years involved, some valuations software annualizes the year because the software only uses full years. This may not be appropriate with the way the economy is presently. Mr. Exeter understands how the software makes the computations and does the computations manually without annualizing the year.

Knowledgeable

As a CPA and 28 years with the Internal Revenue Service, he understands all types of tax returns and financial statements. He knows if creative accounting has been used in preparing tax returns and financial statements. He keeps current on his education including court case and changes in valuations rules. He wrote the audit program for large case audits used by the Internal Revenue Service. Mr. Exeter has valued several medical practices, estate and gift tax, divorce and buy and sell engagements and understands the problems and court cases involved in these valuations.

Fraud Experience

He has 28 years experience in fraud with the Internal Revenue Service. He worked in organized crime while in the IRS. During his 12 years in his own tax and accounting office and 12 years doing Certified Business Valuations, he has uncovered tax fraud, audit fraud and creative accounting schemes. He has uncovered Ponzi schemes and other criminal acts. It is important to understand fraud schemes because if there is fraud in the tax returns and financial statements, the valuation report may not be valid. He also understands when tax returns and financial statements are not prepared correct, which may affect the net profit and the valuation results.

NACVA Certified

The National Association of Certified Valuation Analysts certifies only Certified Public Accountants who also belong to a State CPA Society or the American Institute of Certified Public Accountants. The member must comply with the educational requirements of those associations as well as those of NACVA. The member must also comply with the standards and rules of those associations as well as the standards and rules of NACVA.

Prior to becoming a Certified Valuation Analyst (CVA) the member must successfully complete a rigorous training and testing process. Accreditation is a statement to the business, professional and legal community that the person has attained a level of knowledge in business valuations considered exemplary and worthy of recognition by this association.

Many consider CVA’s who are also CPA’s to be the most qualified group of consultants to provide independent business and intangible asset valuation services. A background in tax, auditing, accounting, and financial analysis, along with specialized knowledge in business valuations prepares the CPA, CVA to effectively manage the intricate complexities inherent in businessvaluations.

The CVA professional is qualified to provide business valuation services to:

Attorneys
Business Brokers
Business Owners
Financial Institutions
Financial Planners
Insurance Companies
Investment Bankers
Judges
Real Estate Appraisers
Banks or Trust Companies

Tuesday, October 6, 2009

Avoid Payment of Capital Gain Tax Upon Sale of Business

Tax Deferred Strategies on Sale of Business
There are many capital gain strategies available today for taxpayers selling a business. These capital gain strategies allow taxpayers to defer, exclude or eliminate the recognition and/or payment of their capital gain taxes from the sale of their business.

1031 Exchange May Not Be Most Suitable Tax Deferred Strategy
1031 Exchanges are only one solution that taxpayers and their advisors may turn to when they wish to defer the payment of their capital gain taxes when selling an investment. While the 1031 Exchange structure is often the best capital gain solution for many taxpayers, it is not always the best capital gain option when selling a business operation because the 1031 Exchange requires the taxpayer to reinvest in like-kind replacement property. Business owners may not wish to reinvest in like-kind replacement property by acquiring another business or assets. This is especially true as the baby boomer generation reaches retirement age and they want to merely cash out.

Seller Financing is Risky
However, they often do not want to get hit with all of the capital gain taxes in one year, either. Business owners can offer to carry back a note (seller carry back financing) so that their capital gain taxes are deferred or stretched out over the term of the seller carry back note. This also means that the buyer remains in the picture and can cause distress by defaulting on the note and/or running the business into the ground.

The Deferred Sales Trust
One relatively new option is the Deferred Sales Trust, which is drafted pursuant to Section 453 of the Internal Revenue Code just like the seller carry back note. However, the buyer is out of the picture so that the risk of buyer default under the terms of the note are eliminated. The taxpayer can choose the term of the seller carry back note in order to determine the length of time they wish to defer or stretch the payment of their capital gain taxes.

Informational Article on the Deferred Sales Trust
Read the article entitled How To Avoid Capital Gains Taxes With a Deferred Sales Trust for a better description of the Deferred Sales Trust, or you can request a Deferred Sales Trust illustration via the Exeter Fiduciary Services, LLC web site.

Monday, September 28, 2009

The Reality of the California Real Estate Market

The Reality of the California Real Estate Market:

Siftings from the Tea Leaves of a Demographic Guru Webinar

Click here to view other upcoming webinars in The Exeter Edge™ Webinar Series.

Go To Webinar Registrations Are Required
Click here to register for this webinar on the California real estate market.

Confused About What To Do Next in Real Estate?
The "Great Recession" has left many of us scratching our heads and wondering what's next? Where do we go from here? How should we reposition our real estate portfolio going forward now that we are emerging from recession? Should I hang tight, or make an investment move now?

We realize these are confusing times, which is why Exeter 1031 Exchange Services, LLC is hosting this webinar for you. Our goal is to provide you with up-to-date real estate market data and information so that you can make better informed investment decisions.

"The Nation of California: An Almost Flat Line in 2009"
This exciting webinar will provide an update on the California real estate market and an overview of certain demographic trends that will affect investment property in the California real estate market. It will help you answer the above questions, and help you decide how to position your own investment portfolio as we move forward beyond the recession.

Hosted by:

William L. Exeter
President and Chief Executive Officer
Exeter 1031 Exchange Services, LLC

Presented by:

Alan N. Nevin
Director of Economic Research
MarketPointe Realty Advisors

Date and Time

Thursday, October 1, 2009
8:55 AM PDT Login
9:00 AM — 10:00 AM PDT Webinar

Go To Webinar Registrations Are Required
Click here to register for this webinar about demographic trends in California.

Saturday, September 26, 2009

Deferring Capital Gain Taxes Upon Sale Of A Business

Business valuations are also affected by your income tax strategies. The ability to defer the payment of income taxes adds to the bottomline, which can add to the value of the business under certain circumstances.

We have found a growing number of taxpayers who are part of the baby boom generation are looking for ways to exit real estate. They do not wish to reinvest via a 1031 Exchange, but are looking for real estate exit strategies where they can get competely out of real estate and still defer the payment of their capital gain taxes.

While the 1031 exchange is still generally the best tax planning strategy for real estate because you can continue to 1031 exchange throughout your lifetime and then leave the investment property to your heirs at a stepped-up cost basis, we do realize that some taxpayers just want to get out, or perhaps are selling an assets, such as a business that is not well suited for a 1031 exchange.

Taxpayers who fall into this category may want to consider a Deferred Sales Trust as a real estate exit strategy that allows them to sell their asset and still defer the payment of thier capital gain taxes over a period of time to be defined by them. The Deferred Sales Trust is structured pursuant to Section 453 of the Internal Revenue Code, and the IRS has issued a Private Letter Ruling regarding the Deferred Sales Trust strategy.

It is essentially an alternative for taxpayers to consider when the 1031 exchange strategy is not a suitable approach for them to take. Careful analysis is required to ensure that either is a suitable tax planing strategy, so always consult with your tax advisor before proceeding.

When The 1031 Exchange Is Not The Right Solution: Deferred Sales Trusts

Baby Boom Generation Looking for Alternative to 1031 Exchange
We have found a growing number of taxpayers who are part of the baby boom generation are looking for ways to exit real estate. They do not wish to reinvest via a 1031 Exchange, but are looking for real estate exit strategies where they can get competely out of real estate and still defer the payment of their capital gain taxes.

1031 Exchange Still Preferred Strategy
While the 1031 exchange is still generally the best tax planning strategy for real estate because you can continue to 1031 exchange throughout your lifetime and then leave the investment property to your heirs at a stepped-up cost basis, we do realize that some taxpayers just want to get out, or perhaps are selling an assets, such as a business that is not well suited for a 1031 exchange.

Alternative Strategy: Deferred Sales Trust
Taxpayers who fall into this category may want to consider a Deferred Sales Trust as a real estate exit strategy that allows them to sell their asset and still defer the payment of thier capital gain taxes over a period of time to be defined by them. The Deferred Sales Trust is structured pursuant to Section 453 of the Internal Revenue Code, and the IRS has issued a Private Letter Ruling regarding the Deferred Sales Trust strategy.

It is essentially an alternative for taxpayers to consider when the 1031 exchange strategy is not a suitable approach for them to take. Careful analysis is required to ensure that either is a suitable tax planing strategy, so always consult with your tax advisor before proceeding.

Tuesday, May 26, 2009

Land Trust Seminar in Fresno, California on June 11, 2009

Land Trust Seminar in Fresno, California

This is a basic level discussion regarding the benefits and advantages of using the California Land Trust to hold California real property or any personal property under a California Land Trust. The discussion will include the requirements, structures, processes, strategies, and compliance issues necessary to successfully establish and maintain a Title Holding Trust, which is often referred to as an Illinois Land Trust.

Click here for complete details and to reserve your spot at the free seminar.

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About Me

Eminent Domain or Condemnation

In condemnations do you or the Government Agencies really know what the value of a business, asset or property is worth? Are values of locations, leases, and other intangibles taken into account? A Certified Valuation Analyst can determine these values.

In case a government agency acquires your property by way of eminent domain, the business may be entitled to damages for disruption of business or reduction in business because of the relocation. A valuation may be needed at the time of the eminent domain proceeding and at a later date to determine the loss due to relocation of the business. If the business is unable to relocate then the government agency may be liable for the value of the business. This would be true whether the business owns the real estate or whether there is a lease involved.

Selling a Business

In the case of a sale to an outside party, proper knowledge of a realistic valuation for the business is essential before the search for a buyer is launched.

Serious damage can result when a business is marketed for sale and the owner has an unrealistically high expectation of an appropriate sales price. Once the word that the company is for sale reaches the street, many harmful things can occur such as employee abandonment, insider theft, and reduced production. If the business does not sell because of an impractical estimation of the worth, the company may be left with a depleted, poorly producing organization. In addition, a business valuator will reflect the various intangibles and other correct values. Otherwise, purchasers may just look at the financial statement and think that is all the business is worth.

Buying a Business

As everyone knows, the profits of a business carry most owners on a financial and emotional roller coaster. When purchasing a business, a thorough review of the financial history must obviously be made. However, a more important process that should be conducted is in ascertaining the true earnings capacity of the subject business. A valuation analyst will be able to identify items, particular to that company, which affects its ability to make money. A business valuator can help against a misguided, emotionally based purchase decision that could bring more headaches than profits. The "Golden Rule" for purchasing a business is "no deal is better than a bad deal".

It is better to obtain the financial statements and tax returns for a minimum of five years and more if possible. Many times financial statements may be adjusted in anticipation of selling the business. The more years of financial statements and tax returns available will help determine if adjustments need to be made in the analysis.

Buy/Sell Agreements

The prudent rule prior to entering a business is to establish a formal agreement for getting out of the business relationship. Buy and sell agreements allow the business owner to transfer an interest in the business to other owners or to the business itself. The agreement can guarantee a buyer for the business and eliminate difficulties associated with transferring the business upon death or disability of one or more of the owners. Conflicts among interested parties to the business may be minimized by clearly establishing the definition of market value prior to the time of need. The value of a company changes from time to time because of the economy and the prevalent industry trends. A buy-sell agreement that is structured through a set formula of value will consistently produce an accurate determination of goodwill. Goodwill is a critical material element of the total true value of the company or business.

Valuation for Financing

Valuations frequently arise when attempting to secure financing or when renegotiating a current obligation. Business valuations include a determination of the value of tangible assets and intangible assets. Tangible assets may include buildings, land, equipment, inventory or receivables. Intangibles may include goodwill, customer lists, trademarks, non-compete agreements, patents, or leaseholds, to name a few. Determining the market value of the company’s capital assets will help determine the ability of the business to cover its current obligations and/or projected future debt.

Divorce Valuations

State law provides the effective date. The valuation is not based on future income methods. State law may or may not provide for marketability discounts.

Marital dissolution is a major force in determining the need for business valuations. Many cases involving divorce will require a business valuation for each marital partner. Determining an accurate assessment of value may minimize the need for litigation. If litigation is required, a variety of valuation issues must be considered. Issues include intrinsic value versus fair value, personal goodwill, fair and reasonable owner’s salary, discounts and premiums for minority versus control positions, and lack of marketability to sell the business.

In addition, the valuator may have to determine how the business was held – community property, separate property or some other way. A prenuptial agreement would have to be considered. If the business was started prior to marriage, it may have to be valued at the beginning of the marriage and upon dissolution. In addition, pension, profit sharing and stock ownership plans may have to be valued.

Valuations for Estate and Gift Taxes

Estate and gift tax issues are becoming more complex. Unlike some circumstances, whereby objective opinions of value are desirable but not required, valuations for these tax filings are mandatory. The primary reason is that market value is the basis upon which tax and penalties are applied. The third party in the scenario is the Internal Revenue Service. It is difficult enough to oppose the IRS. Use of an independent business valuator should minimize the risks of challenge and maximize the probability of a successful defense. This issue is compounded with gifting of closely held stock, family limited partnerships, or charitable contributions. For charitable donations or estate tax returns, it is important that the assets be appraised or valued by persons certified as specialists in the particular type of property.

Estimating the value of the assets, which will ultimately be transferred to your estate, is an essential element of proper estate planning. A valuation of your company or business will help you project your estate’s gross value and, therefore, your ultimate estate tax.

Litigation Support

The most important event in business litigation is the deposition of a witness. Most cases settle after this discovery process, based on assessments of the quality and demeanor of each witness. In addition to the expert testimony, the valuator should assist counsel in preparing to depose the opponent’s witness. This would include areas to probe for weakness in approaches to valuation, reputation of the witness, data used or not used and specifics about the analytical process. The expert witness should answer only questions asked, be directly to the point and do not antagonize the opposing attorney. An expert witness can be helpful in the following disputes:

Disruption of Business
Dissenting Shareholder Actions
Divorce
Economic Loss Analysis
Eminent Domain
Mediation and Arbitration
Partner Disputes
Wrongful Death

Insurance Claims

There are many things that can create insurance claims involving your business. Such things as natural disasters, auto accidents, embezzlements, thefts, eminent domain proceedings to name some. I can represent either the insurance company or the business owner, but not both at the same time.

When an insurance company is involved, they will have an expert representing them. If the business owner wants to be successful, they should also have an expert on their side. Items that are not shown on the financial statements such as favorable leases, intangibles, location, goodwill are important and should be considered. Do not rely on the insurance companies to bring these items to your attention.

With a professional business valuation report, you may be able to obtain a fair settlement without litigation. If litigation is required be prepared to have an valuation expert on your side.

Exeter Business Valuations

Contact Information

Business Valuation Services

What's Your Business Really Worth?

Integrity

Independence

Knowledgeable

Fraud Experience

NACVA Certified

Tuesday, October 6, 2009

Avoid Payment of Capital Gain Tax Upon Sale of Business

Monday, September 28, 2009

The Reality of the California Real Estate Market

Saturday, September 26, 2009

Deferring Capital Gain Taxes Upon Sale Of A Business

When The 1031 Exchange Is Not The Right Solution: Deferred Sales Trusts

Tuesday, May 26, 2009

Land Trust Seminar in Fresno, California on June 11, 2009

The Exeter Group of Companies

About Me

Eminent Domain or Condemnation

Selling a Business

Buying a Business

Buy/Sell Agreements

Valuation for Financing

Divorce Valuations

Valuations for Estate and Gift Taxes

Litigation Support

Insurance Claims

Business Valuation Blog Archive

Copyright

Exeter Business Valuations

Contact Information

Business Valuation Services

What's Your Business Really Worth?

Integrity

Independence

Knowledgeable

Fraud Experience

NACVA Certified

Tuesday, October 6, 2009

Avoid Payment of Capital Gain Tax Upon Sale of Business

Monday, September 28, 2009

The Reality of the California Real Estate Market

Saturday, September 26, 2009

Deferring Capital Gain Taxes Upon Sale Of A Business

When The 1031 Exchange Is Not The Right Solution: Deferred Sales Trusts

Tuesday, May 26, 2009

Land Trust Seminar in Fresno, California on June 11, 2009

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The Exeter Group of Companies

About Me

Eminent Domain or Condemnation

Selling a Business

Buying a Business

Buy/Sell Agreements

Valuation for Financing

Divorce Valuations

Valuations for Estate and Gift Taxes

Litigation Support

Insurance Claims

Business Valuation Blog Archive

Copyright