Business Valuation Resources, LLC

Estate of Gallagher: How the Court Sees the State of Business Valuation
Part 1 of BVR's 2011 Online Tax Summit

Date: Thursday, October 20, 2011
10:00am-11:40am PT / 1:00pm-2:40pm ET
Format: A BVR Webinar

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Featuring (click image for more information):

Z. Christopher Mercer
Mercer Capital

L. Paul Hood Jr.
Attorney at Law

Why You Should Attend:

The decision in Estate of Gallagher v. Commissioner reads like a memorandum on the state of valuation and its favored methods of analysis. Covering the guideline public company method, income approaches, tax-affecting, adjustments to financial statements, cash flow projections, rates of return, subsequent events and discounts for lack of marketability, Gallagher touches on nearly every point of the valuation process – and certainly every contentious issue within the valuation community. With this one decision the court has seemingly entered the fray of nearly all valuation disputes, if not further asserting itself in those on which it had already weighed.

To help make sense of this decision and what it means for the myriad of valuation techniques it addresses, BVR welcomes expert appraiser Chris Mercer and attorney L. Paul Hood Jr. for "Estate of Gallagher: How the Court Sees the State of Business Valuation," the first installment of BVR's 2011 Online Tax Summit. Join Mercer and Hood for a thorough examination of this decision, its immediate impact, and what it means for the future of valuation.

Bonus Content

Click here for a free PDF of "Estate of Gallagher v. Commissioner, T.C. Memo. 2011-148"


  • Case Overview
  • Valuation Positions
  • Relevant Financial Information
  • Adjustments to Subject Company Financial Statements
  • Applicability of the Market Approach
  • The Application of the DCF Method
  • The LLC's Financial Projections
  • To Tax Effect or Not?
  • Adjustments to Cash Flow
    • Capital Expenditures
    • Working Capital
  • WACC
    • Cost of Equity Capital
    • Cost of Debt Capital
    • Relative Weights of Debt & Equity in Calculating WACC
  • Adjustments to the LLC's Enterprise Value
  • Applicable Valuation Discounts
    • Discount for Lack of Control
    • Discount for Lack of Marketability
  • The Tax Court's Holding on Value
  • Mercer/Hood Comments on the Case and What It Might Mean for Business Appraisers
  • Closing Thoughts

Learning Objectives

  • Understand the decision in Estate of Gallagher v. Commissioner and identify its implications for the business appraisal process
  • Clarify the position of the U.S. Tax Court on the methods and techniques of business valuation
  • Learn how to best prepare a valuation for tax purposes in light of this decision
  • Sharpen your valuation skills to better present a clear, concise, and defensible conclusion of value in light of the court's decision

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CPE Information

Prerequisites: Knowledge of Business Valuation
Program Level: Advanced
Preparation Required: None
Delivery Method: Group Internet-Based
Recommended CPE: 2 Credit Hours (Specialized Knowledge & Applications)

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Presented With:

  BVR's 2011 Online Tax Summit
Valuing a Majority Fractional Interest
Friday, November 11, 2011, 10:00-11:40am PT
Featuring: Neil Mills-Mazer

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