Explain Ways To Minimise Estate Tax

The proposed LBO deal of Comark Building Systems is an attractive investment for Brazos because it fits into Brazos’ “sweet spot”- a reasonable priced company with solid cash flow and good management. We can project cash flow at $6.8 million in 2002 and $12.3 million in 2006. In terms of the purchase price at $40 million, it is very attractive because we can get very good Total Post Money Valuation at $194 million. We can also confirm that the Market Value/EBITDA (1.38) of CoMark is lower than its competitor’s (3.42) when we compare multiple ratios, which means CoMark is undervalued. However, there are two major concerns; gaining competitive advantage and determining comparable valuations.

Decision Making Area 3:Investment Decisions * Table of Articles * Summary of Articles * Observations * Conclusion

In the Private Sector, there are many choices to be made by Business managers regarding which “projects” to borrow for and which “projects” to invest in.  These choices often contain a great deal of ______________________ as well as the potential for benefits (profits).

6. When considering a real estate investment opportunity, which of the following issues need to be addressed?

If the company can solve the cash shortage problem, taking 2% trade discount is profitable decision.

The next property presented to John and Judy was Ivy Terrace, an 80-unit apartment under construction in Arlington, Virginia. Even though this property has the lowest Net Present Value ($619) and lowest monthly mortgage ($5,500), there exist the greatest increase in Cap Rate from purchase to sale price (9.12% to 9.51%). Based on calculations, 72% of total benefits will be derived from cash flow while 41% of total benefits will come via future value. This property has the second highest After Tax Cash Flow (ATCF) but has the lowest remaining loan balance at sale ($4583.03), net cash from sale ($4868.34), net book value ($5545.45), and capital gains. Ivy Terrace has the highest depreciation and has the lowest percent of total benefit from future value and lowest amortization and reserve among the four properties. Finally, the developer of Ivy Terrace guarantees 93% occupancy.

c. What is the best evidence of fair value? Describe alternate methods of estimating fair value.

Question #1 is a business valuation question. There are a number of ways to estimate the value of a business. You have probably covered one or more of these ways in a previous class. The next two pages review a few of the various ways

Several key elements of Miller’s contrarian strategy included: 1) buy low-price, high intrinsic-value stocks; 2) take heart in pessimistic markets; 3) remember that the lowest average cost wins; 4) be wary of valuation illusions; 5) take the long view; 6) look for cyclical and secular underpricing; 7) buy low-expectation stocks; 8) take risks.

The estate tax is a tax upon your right to transfer property at the time of your death. It is often called the death tax and it has been a partisan point of disagreement for quite some time. As the tax only applies to estates of $5.45 million and over, this tax only applies to the wealthy. Enacted in 1916 to help finance World War I, the estate tax has come under more scrutiny lately because of our government’s financial situation and the one-hundredth anniversary (Caron 825). The intellectual world is divided on whether to repeal, reform, or keep unchanged the estate tax. Some even argue that transfers of wealth should not be taxed at all. This essay will contend that the current estate tax should be replaced with a lifetime accessions tax to encourage donors, reduce concentrations of wealth, and safeguard equality of opportunity. Before arguing for the lifetime accessions tax, this paper will outline the history of the estate tax, the purposes of taxing wealth transfers, and compare the lifetime accessions tax to other proposed alternatives.

Hi Jieyi! Great research in regards to the step-up basis, IRC Section 1014, and Section 6035! There are a plethora of sections that may relate to the topics, and it is critical in reviewing and understanding the applicable sections that may apply to the step-up basis. I agree with you that many taxpayers may be taking advantage of this law as this law would not only apply for wealthy families. However, if it does not conflict with any federal or state laws, then the taxpayers are not performing anything illegal per the federal and state laws. In regards to the step-up basis and my family, inheriting property is better than gifting if the heir decides to sell the property to avoid the gain tax. It is inevitable that some people will attempt

subsequently published articles on the same topic in Business Valuation Review, June 1995, p. 69-74 and September 1996, p.

Other issues that must be considered is whether you have changed any methods of operation in order to improve profitability, whether you have any knowledge needed to continue with activity as a business, whether you have made any profits from similar activities in the past and whether the present activity makes a profit in some years and finally, whether you expect to make future profits from any appreciation in the value of assets that are used in the activity.

habits, age or income; it may be advantageous for Vanguard to pursue these markets after conducting market tests or investment studies.

In addition to acquisitions, Cooper brought significant systematic value to its businesses. Examples of these contributions include, but are not limited to: