What Is the Valuation Impact of Buy‐Sell Agreements?
Buy‐sell agreements can have an impact on the valuation of a business.
However, the degree of the impact is dependent upon the purpose and use of the valuation. The agreement may be governing as a contract and binding on the parties, yet it may not be binding for defining value in a tax context.
In order to be binding in a tax context, it must comply with the three‐part test of Code Section 2703 of the Internal Revenue Code. Additionally, in certain jurisdictions, the buy‐sell agreement
may not be binding such as in matrimonial matters.
Call one of our credentialed professionals to assist you in better understanding the impact of “buy‐sell agreements” on value for the case at hand or any other valuation or litigation needs.
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 merger and acquisitions and fraud and forensic accounting.