Winning the DLOM debate — Use an appraiser to support marketability discounts

Description

Abstract: The discount for lack of marketability (DLOM) attempts to capture the various attributes associated with selling a private interest. But a taxpayer and the IRS may disagree on what constitutes a reasonable DLOM for a particular set of facts and circumstances. This article describes how valuation professionals analyze empirical data to quantify a reasonable DLOM for each subject company based on its specific attributes. A sidebar discusses whether it’s possible to take a DLOM on a controlling interest.