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
One of four types of risks affecting the life insurance company as identified by the society of actuaries. This risk is associated with losses that the life insurance company may incur as ...
Method used to determine the policyholder's return on premiums paid into a life insurance policy. This method is illustrated in two ways:.Surrender of Policy Approach calculation of the ...
Liquid property that can be converted easily to cash. For example, a policyowner can borrow readily against the cash value of a life insurance policy. ...
Premium that equals the net level premium plus the modification of the net level premium to reflect the cost associated with paying for the first year initial acquisition expenses. The ...
One that provides group health or pension benefits for a multiemployer plan. To lower the cost, small firms band together to take advantage of the economies of large group underwriting. ...
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in property and casualty insurance, termination of a policy because of failure to pay a renewal premium. in life insurance, termination of a policy because of failure to pay a premium and ...
Agreement prepared by an insurance company and offered to prospective insureds on a take-it-or-leave-it basis. If the contracts are misinterpreted by insureds, courts have ruled in their ...
Insurance policy designed to provide coverage for the deductible amount and the coinsurance amount required to be paid by the medicare recipient. Some of these policies will also continue ...
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