Taxes and Value: The Ongoing Research and Analysis Relating to the S Corporation Valuation Puzzle

Seven years in the making, Taxes and Value: The Ongoing Research and Analysis Relating to the S Corporation Valuation Puzzle guide provides a substantive contribution to the controversial issue of how to value pass-through entities. Authors Nancy Fannon and Keith Sellers present the findings of decades of academic research on the impact of taxes on firm value and demonstrate that historical market returns impound the effects of shareholder taxes. This research is used to demonstrate how these returns can be adjusted to estimate a cost of capital appropriate for the valuation of a pass-through entity. There are no easy answers to valuing pass-through entities and the research is both dense and ongoing. However, the breadth and depth of information presented in this guide is deep and provides appraisers the ability to make informed inferences to arrive at reasonable valuation conclusions. This guide brings the academic research together in one place and assists the profession in moving forward on its long-struggling quest to solve the pass-through entity valuation puzzle.

Nancy J. Fannon is the partner in charge of litigation services with Meyers, Harrison & Pia Valuation and Litigation Services LLC. She is a nationally known author and expert in the area of economic damages and corporate valuation. With over 25 years of experience as a financial analyst, she frequently serves as an expert witness or a financial consultant in matters involving complex corporate litigation for public and private companies and testifies or consults on matters involving economic damages, unjust enrichment/disgorgement, shareholder disputes, and other damages analyses. She has written for numerous valuation and damages journals, has published three books related to valuation and damages, and has been a technical reviewer or contributing author to several others. Fannon is a frequent national speaker, has served on the editorial boards of four of the major valuation and economic analysis industry organizations, and served as co-chair of a joint industry standard-setting board. In 2007, she was inducted into the AICPA’s “Hall of Fame,” awarded for substantial contributions to the advancement of the business valuation profession.