How to factor taxes into the business valuation equation

Description

Abstract: Taxes certainly affect the value of a business interest. This article explains how investors (and, therefore, business valuation experts) consider taxes — such as expected federal and state income tax rates, deferred tax assets and liabilities, and built-in capital gains taxes — when deciding how much a business interest is worth. A sidebar addresses congressional tax reform plans and how the possibility introduces an element of uncertainty for business interests valued as of December 31, 2016.