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Revenue Ruling 59-60

Determining the value of a business in the course of a divorce can be a complex and contentious issue standing between you and an equitable settlement which is fair to both parties. In many cases, a large corporation with extensive and varied holdings is the target of the valuation and its complexity often prevents a swift and simple valuation. In order to guide the process of business valuation in future cases, the Internal Revenue Service established Revenue Rule 59-60 as a guideline for the definition of “fair market value.”

At Holmes, Diggs & Sadler, our dedicated attorneys are sensitive to the unique challenges that divorce cases can present and have the extensive experience necessary to effectively apply past IRS rulings in a manner that better allows you reach a fair settlement in your divorce. To learn more about your rights and options in court for establishing the value of a business, call a Houston divorce attorney today at (713) 802-1777.

Relevant Factors in Business Valuations

The primary purpose of Revenue Rule 59-60 is to provide a basis for the effective valuation of a business by listing the eight relevant factors that should be considered:

  • The full history of the business and its nature from inception to present.
  • The condition of the general economy as well as the outlook specific to the industry within which the company operates.
  • The precise current value of the company’s stock, and the current financial condition of the business.
  • The potential capacity for earnings possessed by the business.
  • The capacity of the business to pay dividends.
  • The presence of intangible values like goodwill.
  • Any sales of company stock and the size of the block which is being valued.
  • The comparative value of stocks in other companies sharing a line of business or market with the company to be valued.

These guidelines allow the appraiser to evaluate the fair market value of the company, which Rule 59-60 defines as “the price at which the property would change hands between willing buyer and willing seller, neither being under any compulsion to buy or sell and both having knowledge of relevant facts.”

Contact Us

If you are considering divorce and holdings in a large company are a part of your marital estate, it is essential that you have skilled legal representation that understands the intricacies of business valuation in divorce. At Holmes, Diggs & Sadler, our dedicated attorneys have decades of experience in family law and will work diligently to ensure that you receive fair consideration in the division of assets. To schedule a consultation to discuss the details of your case with a Houston asset division lawyer, call us today at (713) 802-1777.

 

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