In Arriving at the Value of Stock in a Closely

question 143

Essay

In arriving at the value of stock in a closely held business, the IRS frequently imputes goodwill. Comment on how the following independent factors would affect the determination of goodwill.
a. Past profits include a large nonoperating gain.
b. Shareholder-employees have not been receiving adequate compensation for their services.
c. The shareholders have been financing corporate operations with interest-free loans.

---

Definitions:

Safety And Security

Measures and protocols implemented to ensure the protection and welfare of individuals and property from harm or theft.

Reader Benefits

The advantages or valuable information that readers gain from engaging with a text or document.

Overconfidence

the state of being more confident than is justified by one's abilities or circumstances, often leading to taking undue risks.

Rewards

Benefits or recognition given in response to an individual's actions or performance.