Questions IRS wants answered about marketability discounts

Description

Abstract: The Discount for Lack of Marketability Job Aid for IRS Valuation Professionals helps IRS field agents better understand the theory underlying this complicated discount. But the relevance of the job aid extends beyond discounts applied in a federal tax context. Anyone who relies on an appraisal that includes a discount for lack of marketability (DLOM) may benefit from reviewing this job aid, which summarizes questions valuators address when selecting a DLOM for a subject interest. This article looks at several of those questions, while a sidebar notes two of the most common DLOM approaches: restricted stock studies and pre-IPO studies.