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Should the Tax on Appreciated Property in the Corporation be Considered in a Valuation

A Thought to Ponder: Should the Tax on Appreciated Property in the Corporation Be Considered in a Valuation?

Historically the IRS refused to allow any adjustment for trapped‐in taxes on appreciated property in a closely held corporation. This position has changed based on recent court decisions. However, there is still no agreement as to the magnitude or how these taxes would affect value. The decisions have allowed as little as 5% of the tax to as much as 100% of the tax and have allowed 100% of the tax present value based on the expectation of incurrence of the tax over time.

Call one of our credentialed professionals to assist you in better understanding the impact of “appreciated property” for the case at hand or any other valuation or litigation needs. Call 440.951.2997 or email dave.zarlenga@h‐jcpa.com.


David F. Zarlenga, CPA\ABV, CVA, CFE Mr. Zarlenga is a Certified Public Accountant with over two decades of experience. Mr. Zarlenga is regularly sought after for a variety of valuation engagements including those involving litigation as well as the estate and gift tax arena. He also is experienced in mergers and acquisitions and fraud and forensic accounting.