A new way to calculate discounts for lack of marketability finds that DLOMs for private companies should be dramatically larger than what's currently being claimed
Perhaps nothing in business valuation is more controversial than the discount for lack of marketability (DLOM).1 This one adjustment can have a sizable impact on clients' tax obligations. So, naturally, one question frequently lingers in attorneys' minds at the end of estate-planning engagements: Did the business appraiser select an appropriate discount? We offer a way to calculate DLOM using a unique empirical approach that directly compares privately held companies to publicly traded ...
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