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Mistakes Women Make When Contemplating Divorce

Women are Too Nice:  Since most women are typically non-confrontational, they instead “hope” that by being amicable in a divorce, the marital assets (especially the husband’s business) will be divided equally and the support for them (and their minor children) will be equitable.  Unfortunately, in some cases, their hope backfires since their husbands have different…

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Taxation on Property Transfers (IRC §1041)

The transfer of property that is not a gift is generally a taxable event requiring the transferor to recognize a gain or loss on the difference between its fair market value and adjusted basis. Prior to 1984, tax regulations required that appreciated property transferred to a non-transferor (receiving) spouse incident to a divorce result in…

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Intangible Assets (2 of 2)

In the first intangible assets article, we discussed the “economic phenomena” of intangible assets and the tests for its economic value and legal existence. These tests, if passed, may indicate the existence of identifiable intangible assets. Intangible assets have two general categories: real and personal property. Intangible real property includes fractional ownership interests in real…

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Royalties

Royalties for licensing intellectual property (IP) such as patents and trademarks are paid to licensors by licensees. The licensors, among other reasons, enter into licensing agreements when they do not have the capital to commercially exploit their patents. In exchange for licensors substantially conveying the rights to their patent, the licensees usually agree to exclusively…

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Bankruptcy Risk Planning: The Z-Score

Bankruptcy occurs when a company is unable to meet maturing financial obligations and petitions a Federal court either for liquidation (Chapter 7) of its assets or reorganization (Chapter 11) of its debts. A company generally receives debt relief in Federal court if it is unable to liquidate its debts as they come due by transferring its assets…

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Divorce Financial Engineering

Financial engineering is the design of creative solutions to problems in finance. From a business valuation perspective, financial engineering is used to increase or decrease the value of a business depending on the motives of the business owner. Unlike publicly traded companies that are motivated by increasing shareholder value by artificially increasing profit and equity,…

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Medical Practice Valuation

A physician needs to value his medical practice for many important purposes. A physician selling his practice or ownership interest and a practice associate buying into a practice are the most typical. Other important purposes include divorce, estate planning and insurance. This article discusses some valuation concepts used when a physician is either buying or…

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Family Law: Understanding the Hypothetical Seller and Buyer

FACT: The emotions of spouses involved in a divorce often obscure the value of a company (or ownership interest), one of their most important marital assets. The spouse keeping the company (in-spouse) often argues that the company is less valuable. On the other hand, the spouse leaving the company behind (out-spouse) often argues that the…

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