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
Federal legislation passed in 1974 that mandated that legislators in all states that are in receipt of federal funds for health care review and approve any planned capital expenditures to ...
Monetary fund established to pay for claims that the insurance company is aware of (claims incurred or future claims) but that the insurance company has not yet settled. This reserve is ...
Right that has a limited time in duration for an individual to receive the income generated by assets owned by another individual. ...
Total of the insurance company's mortgages whose interest has not been paid for at least three months. These are mortgages upon which the insurance company is in the process of foreclosing, ...
Fund that insures mortgages on homes for one to four families; also insures property improvement loans and loans to repair homes after a disaster. It is one of three funds operated by the ...
Legislation that provides for the inclusion in the estate of the decedent of lifetime transfers that involve a retained life interest in the following manner: decedent sells or gives to ...
Coverage against foreign country expropriation underwritten by the overseas private investment corporation (OPIC) for U.S.-owned companies investing in given developing countries. ...
Ruling issued in 1988 by the Internal Revenue Service that stipulates that, when computing the pension benefits of an employee still working after 1987, the years of service on the job ...
Coverage in the event of a marine loss. Marine loss is damage or destruction of a ship's hull and the ship's cargo (freight) as the result of the occurrence of an insured peril. Perils ...
Have a question or comment?
We're here to help.