Revenue Ruling 59-60
Ruling that is the most significant source for the valuation of closely held corporation capital stock critical to the close corporation plan. This ruling defines the fair market value as "the price at which the property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of the relevant facts." The valuation of the shares of closely held corporations involves the comparison of "prices at which the stocks of companies engaged in the same or similar line of business are selling in a free and open market." This ruling stipulates that the following factors must be carefully considered in such an evaluation: intangible values such as goodwill; financial ability to generate an ongoing dividend stream; earnings capability; type of business and its financial and market history; economic outlook for the industry in which the business resides; financial condition of the corporation as well as the book value of its stock; size of the block of stock requiring a valuation; and market value of stocks actively traded on an exchange or over-the-counter market of similar corporations engaged in similar lines of business.
Popular Insurance Terms
Rate not subsequently adjusted. The rate stays in effect regardless of an insured's subsequent loss record. ...
Same as term Fortuitous Loss: loss occurring by accident or chance, not by anyone's intention. Insurance policies provide coverage against losses that occur only on a chance basis, where ...
Insurance protection written in the form of a single line policy. ...
Provision in the extended coverage endorsement stating that smoke damage is covered when it results from the sudden, unusual, and faulty operation of an on-premises cooking or heating unit, ...
Addition to the pure cost of insurance that reflects agent commissions, premium taxes, administrative costs associated with putting business on an insurance company's books, and ...
Federal program to insure private U.S. investments in foreign countries, created by the Foreign Assistance Act of 1961. It is a joint government and private effort to encourage U.S. ...
Adjustment of the burning cost ratio for the increase in number and size of losses (losses likely in excess of that used in the unadjusted burning cost rate), incurred but not reported ...
Estimated future dividends to be paid by a participating insurance policy. These dividend estimations cannot be part of the policy since they are not guaranteed. They are normally shown in ...
Bond derivatives of short-term duration whose principal or coupon value is determined by a market index. Market indexes that can be utilized include securities, commodity prices, and ...
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